It’s hard enough as it is to find a good house in the GTA, but could auctions be the next big step for prospective buyers? Are buyers more interested in a transparent process that lets them see the REAL market price of a home – and will realtors and agents go for it?
Real Market Value
It’s not easy to figure out the real market price of a home; smart sellers will price their homes just a little bit below what they think it would sell for. Others will set it so low hoping to spur a bidding war that will capture the hearts and wallets of buyers that just have to have this property.
But how much good do either of these strategies do? Even luxury homes final sale price tend to fall short of the original listing price, and both buyers and sellers are at the mercy of their realtors to get the best deal.
The thing about auctions is that the devil is in the details. You need certified appraisers, a realtor or auction group that has done this before and they keep dirty tricks like holding offers for a week or two to a minimum.
Peak Selling Season Just Around the Corner
Snow may cover the ground now, but in a matter of weeks spring will arrive – and with the thaw, the frenzy to find the perfect home will start all over again… but will you buy (or sell) your next home bidding blindly, or will you auction it off?
There’s no doubt about it: inventory is at a critical point across the GTA. The dilapidated house that went for $800,000 (and needed $400,000 worth of renovations) is proof positive of that.
Bidding wars are fueled by emotion and the desire to be close to what matters in Toronto – but auctions change all that. It’s all decided in the space of a few minutes – and while the prices can easily run $100,000 over the asking price for a prime property, buyers at least understand what they’re getting into when they walk into an auction.
Bidding Blindly Falling Out of Favour
Auctions are great for buyers because it’s all over in a few (sometimes painful) minutes, but sellers benefit too. According to a research survey conducted on the Australian home auction market (one of the strongest in the world), it benefits sellers too.
80% of sales actually netted 20-25% over the starting price (appraised value) of the home, since many bidders get caught up in the spirit of things trying to win the property. Some sellers may not get as much as they hoped for, and the thought of losing a life of hard work in a few seconds can be a little too much to bear.
Either way, auctioning could very well be the next thing that helps prospective buyers and sellers get what they want – realtors may not like it so much though.
The Goodale Miller Team is the #1 team in Canada for Century 21 11 years running. Specializing in Oakville luxury real estate including Lakefront homes, infill building lots, condominiums and more. You can visit their website here.