COVID Crazy Real Estate Prices
Bidding wars, multiple offers, line-ups of showings are all a product of the new frenzy to exit high population areas like the GTA. Residents in Tiny have been approached directly by both agents and buyers, knocking on their doors or through letters and mail drops looking for anyone who was willing to sell their property. Due to the current historical shortage of listings, it has become a very competitive Seller’s market.
We have already had the Baby Boomer generation transitioning here to retire, but now the risk of COVID has created a surge of seniors looking to reduce their risk of serious illness. This is especially true of people who downsized into condos where elevators and underground garages make social distancing and disinfecting a constant challenge. The lockdowns have trapped residents in buildings that often do not have greenspace or balconies. Even walking outdoors with masks in high density areas can make some individuals uncomfortable.
Add to the frenzy, investment buyers looking for properties with Air BnB potential, the demand for which has exploded with people’s inability to travel or visit family. The result is unprecedented demand for recreational properties. Tiny’s extensive beaches, gorgeous views, shorelines, and access to Georgian Bay have charmed these city dwellers, many of whom never knew that Tiny existed until they were searching for a vacation rental. Unfortunately, that made for a stressful summer in 2020 as we were overrun with tourists and our beaches were crowded with people competing for space. Social distancing was not always a priority.
Bidding wars have been a great way for owners to sell in a high demand, low supply market. Record prices have been achieved regardless of the condition of the home or cottage and that has also been true for vacant lots. It is not unusual to have 10-20 or even 30 offers on a property, especially with a list price below $500,000 and a good location.
Steps for a bidding war
1. Agree to a price that will attract buyers based on current market data. Set a date and time for offer presentation. Install a “Coming Soon to Realtor.ca” sign on the property a few days to a week before the listing is live on Realtor.ca. (this is optional)
2. Take that week to declutter the house and do a basic clean up inside and outdoors. The cleaner the house, the better it shows, but many homes in “as is” condition have sold for record amounts. It is about location and lack of inventory that drives prices.
3. Have professional photographer take photos, drone shots to show surrounding area and a virtual tour to attract the most potential buyers.
4. Schedule time frames for showings. COVID protocols such as masks, gloves, hand sanitizers and no touching of surfaces are followed by agents and their clients. Standard COVID disclosure forms must be signed before showings. Some owners prefer to be away for a few days rather than be inconvenienced by the intrusions. The time frame is generally 4 to 10 days before the offer presentation date. One property had 90 showings over a period of 10 days. It was vacant.
5. The seller and all buyer’s agents are informed of the number of offers that are registered by presentation time. There is a Form 801 that registers the signed offer, but does not disclose the details or price of the offer until the actual offer is submitted by the deadline time.
6. If the offer that is accepted by the Seller has no conditions, such as home inspection or financing, then the property is sold once the Seller signs the acceptance, as long as no changes were made.
7. At times, a seller will go back to the buyer asking for a higher deposit, a change in closing date or removal of conditions in which case, the buyer has to accept those changes before the property is deemed sold.
Buyers are jumping into this market often without the opportunity to do their due diligence such as home inspections. They are sometimes represented by out-of-town agents who are not familiar with septic systems, wells or legal beach accesses in our area. Caveat emptor – “let the buyer beware” so that there are no surprises or regrets after taking possession.
Samples of bidding war results:
1. Bluewater Beach area: 4 bedroom & 2 bath cottage with electric baseboard heat, built in 1983, 2300 square feet, all original inside and in need of renovations, listed for $438,000 and sold for $608,000
2. Lafontaine Beach area: 3 bedroom & 2 bath cottage with forced air gas heat, built in 1971, 2200 square feet, all original inside and in need of renovations, listed for $499,000 and sold for $675,000
3. Lafontaine Beach area: Vacant lot 100 feet X 150 feet on municipal water, walking distance to beach, listed for $199,900 and sold for $256,000.
Irene Wilson, Wendake Beach Sales Representative
RE/MAX GEORGIAN BAY REALTY LTD.
Member, Education Committee, Georgian Bay Association of Realtors