Spring is in the air in the Calgary real estate market! Confidence is high and houses were moving quickly in 2014’s first quarter. We have seen the average number of days to sell a property in Calgary plummet from 46 in December to 28 in March!
While this number encompasses all types of residential properties at all price points in Calgary, the reality for many sellers today is that you can receive an offer on your home within the first 48 hours of listing. If you are in a good location, your home shows well and you are priced right, we are often seeing very strong offers in the first day or two on market and are seeing competing offers become more common.
The rules surrounding competing offers can be difficult to navigate and it’s important to have expert advice whether you are on the buyer’s side or the seller’s side of the sale. The main issues dealt with in the Real Estate Act in Alberta as well as the Calgary Real Estate Board’s rules and regulations for competing offers are privacy of and fairness to all parties.
In Alberta, we operate under a blind-offer system. All buyers have the right to know that they are competing and their real estate agent can ask for the names of the other agents involved, so they can call and verify the existence of competing offers (something I have adopted as a standard practice in my business). However, buyers will not be told any details of the other offers including price, conditions, possession date, etc.
This means that all bidders are offering based on the same information and they simply need to put their best foot forward. The sellers will then review all offers and determine which offer they would like to accept or counter-offer. In today’s market, nearly all competing offer situations will result in the house selling at or above the list price, which is a treat for the sellers.
However, there are other ways that a buyer can make their offer appealing without increasing the price tag – less conditions, higher deposit, flexible possession. These items all have pros and cons and need to be discussed based on your individual situation.
Although competing offers can be frustrating for buyers, it’s important to maintain a neutral attitude toward the process and make the best decision for you. You need to submit a price with which you will be comfortable either way – not feeling that you overpaid if you get the house while not feeling that you left money on the table if you lose the house. This price depends on many factors including your motivation level, risk tolerance, timing needed for a new house and on the most recent comparable sales.
Sometimes a house can be worth spending $10,000-$25,000 or more above list price for various reasons – if it is the perfect house for you, was listed aggressively on the low side, has excellent resale potential, is a rare product, etc. With real estate, it’s about finding value for you, not just getting a certain dollar amount or percentage off of the list price.
Please contact me if you have questions about competing offers.
Meanwhile, the Home Price Index (HPI) has been steadily rising in Calgary. Please click here for a full explanation of the HPI. A base value of 100 was established in January 2005. In March 2014, the single-family HPI was 208 and the condo HPI was 201 so in both sectors, property values have more than doubled since January 2005.
Those numbers have both grown significantly just in the past 12 months as well. The single-family sector is up 9.5% from 190 to 208 since March 2013. The condo apartment sector is up 11.6% from 180 to 201. The stronger increase in the condo market can be partially attributed to the lack of affordability in the single-family sector that forces some buyers into the condo market, therefore driving up prices with extra demand.
Although there are general trends in the Calgary marketplace, different areas and price categories are reacting differently. For an evaluation on your home, please email me and I can give you real-time information on comparable sales and statistics for your neighbourhood.
