Real Estate

Ottawa and Surrounding Area Real Estate market discussion

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  • Jan 16th, 2021 9:41 pm
Newbie
Aug 29, 2012
47 posts
18 upvotes
Ottawa
Looking for some input / advice for a first time buyer. Listing went out yesterday for a house in the outskirts, setup appointment to go view today. Got a message from my agent stating that there are 2 other offers and that they would start reviewing the bids tonight.

With the market being where it is, our agent is recommending we offer 10-15k over asking. This would bring our bid to the very top of our budget. Is this simply an aggressive tactic to ensure we get the house leading to their (higher) commission? Is the agent just trying to help us get a house we want in a hot market?

Obviously we'd have inspection and financing conditions. We don't have any condition for possession / move in dates so I am thinking that even if we bid closer to asking, we might still have a chance?
Deal Addict
Jan 15, 2017
3613 posts
2970 upvotes
cbalain wrote: Looking for some input / advice for a first time buyer. Listing went out yesterday for a house in the outskirts, setup appointment to go view today. Got a message from my agent stating that there are 2 other offers and that they would start reviewing the bids tonight.

With the market being where it is, our agent is recommending we offer 10-15k over asking. This would bring our bid to the very top of our budget. Is this simply an aggressive tactic to ensure we get the house leading to their (higher) commission? Is the agent just trying to help us get a house we want in a hot market?

Obviously we'd have inspection and financing conditions. We don't have any condition for possession / move in dates so I am thinking that even if we bid closer to asking, we might still have a chance?
Seems like you don't trust your agent. This makes for a difficult working relationship.

It is difficult for anyone to answer your questions as we don't know the particulars of the house. I can tell you that I live in Orleans and when my next door neighbour listed recently he received an offer within 6 hours for $13k above asking. That offer was the first offer and he accepted it. The buyers had lost out in a previous bidding situation and wanted to nail down this one at the beginning.

In general, when there are competing offers, you should be prepared to offer your very best offer. For your very best offer, you need to look at the price, the deposit amount, the closing date, and the conditions. Look at it from the seller's point of view. You have 3 offers on the table and even if they are close in price, a higher deposit may indicate a more serious commitment and conditions like financing and home inspection can provide a potential out for the buyer. As a seller, if I had competing offers, I would look more favourably at those without financing and home inspection conditions.

But, you have to be comfortable with your decisions. If you need these conditions in your offer, be prepared to lose in a multiple offer situation.
Newbie
Aug 29, 2012
47 posts
18 upvotes
Ottawa
skeet50 wrote: Seems like you don't trust your agent. This makes for a difficult working relationship.

It is difficult for anyone to answer your questions as we don't know the particulars of the house. I can tell you that I live in Orleans and when my next door neighbour listed recently he received an offer within 6 hours for $13k above asking. That offer was the first offer and he accepted it. The buyers had lost out in a previous bidding situation and wanted to nail down this one at the beginning.

In general, when there are competing offers, you should be prepared to offer your very best offer. For your very best offer, you need to look at the price, the deposit amount, the closing date, and the conditions. Look at it from the seller's point of view. You have 3 offers on the table and even if they are close in price, a higher deposit may indicate a more serious commitment and conditions like financing and home inspection can provide a potential out for the buyer. As a seller, if I had competing offers, I would look more favourably at those without financing and home inspection conditions.

But, you have to be comfortable with your decisions. If you need these conditions in your offer, be prepared to lose in a multiple offer situation.
Thanks for the response.

It's not necessarily that I don't trust my agent. But no one is in the business of not making / losing money. Would I rather get paid for all the work I do or just keep doing it and hope that I get something at the end? It can't be easy being a real estate agent.

As a first-time buyer, I'm just trying to make sure I get it right. It is a huge investment after all. It's more of a, "should I just take everything the agent says and go with it", or should I be doing some kind of due diligence by asking certain questions (info on comps in the area, resale, etc...) before going with that strategy?
Deal Fanatic
Jul 4, 2004
5845 posts
1902 upvotes
Ottawa
cbalain wrote: Looking for some input / advice for a first time buyer. Listing went out yesterday for a house in the outskirts, setup appointment to go view today. Got a message from my agent stating that there are 2 other offers and that they would start reviewing the bids tonight.

With the market being where it is, our agent is recommending we offer 10-15k over asking. This would bring our bid to the very top of our budget. Is this simply an aggressive tactic to ensure we get the house leading to their (higher) commission? Is the agent just trying to help us get a house we want in a hot market?

Obviously we'd have inspection and financing conditions. We don't have any condition for possession / move in dates so I am thinking that even if we bid closer to asking, we might still have a chance?
I don't think the agent cares that much about the actual sale price as far as the commission but he'd rather get a sale than no sale which might be why he was recommend going $10k-15k above (Assuming they are making 1.5% (after all their fees) from the sale, for a $400k house, the commission will be $6k, suggesting increasing your price to $420k would give them $6300 commission - it's not huge increase for them. While there are sleazebag agents, for the most part, I think they are ok and just want their clients to be happy - if he / she is saying that you need to go $10k above, I think it's because he / she would like to see you get the home you want and are thinking, with multiple offers, that's likely what you'll have to pay and not just so they get their commission since they probably assume that if you don't buy this one, you'll buy the next one that comes along with with.
Deal Addict
Nov 11, 2004
3171 posts
333 upvotes
Ottawa
cbalain wrote: Looking for some input / advice for a first time buyer. Listing went out yesterday for a house in the outskirts, setup appointment to go view today. Got a message from my agent stating that there are 2 other offers and that they would start reviewing the bids tonight.

With the market being where it is, our agent is recommending we offer 10-15k over asking. This would bring our bid to the very top of our budget. Is this simply an aggressive tactic to ensure we get the house leading to their (higher) commission? Is the agent just trying to help us get a house we want in a hot market?

Obviously we'd have inspection and financing conditions. We don't have any condition for possession / move in dates so I am thinking that even if we bid closer to asking, we might still have a chance?
Make an offer with what you are comfortable with, As you will be 2nding guessing yourself forever otherwise ;)
Hello
Deal Addict
Nov 13, 2013
2364 posts
1152 upvotes
Ottawa
cbalain wrote: Thanks for the response.

It's not necessarily that I don't trust my agent. But no one is in the business of not making / losing money. Would I rather get paid for all the work I do or just keep doing it and hope that I get something at the end? It can't be easy being a real estate agent.

As a first-time buyer, I'm just trying to make sure I get it right. It is a huge investment after all. It's more of a, "should I just take everything the agent says and go with it", or should I be doing some kind of due diligence by asking certain questions (info on comps in the area, resale, etc...) before going with that strategy?
Me I ask for comps before I even look at a place. Key question is this a cookie cutter house that meets your needs but so will others? or is it something like the only house backing on to a ravine with a walk out basement and a accessible bathroom you need? If it is unlikely many other houses will meet your needs then be comfortable paying over asking. Otherwise 2 offers is not much they could easily both fall through or be lowball offers.
Sr. Member
Aug 14, 2007
524 posts
281 upvotes
Ottawa
This market is not easy for first-time buyer. I guess even you are willing to put $10k to $15k more than asking, if you put finance and inspection conditions in your offer. Most likely, the seller will not take it.

On the other hand, you will never know if you never try.
Member
Nov 10, 2014
389 posts
534 upvotes
Ottawa, ON
cbalain wrote: Looking for some input / advice for a first time buyer. Listing went out yesterday for a house in the outskirts, setup appointment to go view today. Got a message from my agent stating that there are 2 other offers and that they would start reviewing the bids tonight.

With the market being where it is, our agent is recommending we offer 10-15k over asking. This would bring our bid to the very top of our budget. Is this simply an aggressive tactic to ensure we get the house leading to their (higher) commission? Is the agent just trying to help us get a house we want in a hot market?

Obviously we'd have inspection and financing conditions. We don't have any condition for possession / move in dates so I am thinking that even if we bid closer to asking, we might still have a chance?
Agent is probably not looking for the incremental commission increase on extra 10~15k. He/she wants to submit a competitive offer that has a chance of being accepted.

Need to be more specific on what house in the outskirts is. If it is a house in the boonies with a septic and wells system, that house is likely going to sit for a while even in this market. If it is a townhouse in Barrhaven and Kanata listed sub 400k, chances of it going "only" 10~15k over ask is low. My guess is that the property in question is closer to the latter since it received 2 bids just after going on the market.

Ask your agent to the comparables for the last 3~4 months. Take the average and that should give you a good idea on what the fair sale price is for the property. Bid higher if you really like the property, and bid lower if you find the property to be just passable.

Lastly get a hard preapproval from a lender so you can submit bids without the financing condition. Get your agent to also schedule a tentative home inspection (should the offer get accepted) for the day after the offers are reviewed so your home inspection clause be can met within a day or two. Many sellers will take a bit less than the highest offer if the conditions are much more favorable.

It is a rough time to be a buyer right now, especially when looking for specific types of properties. (eg. Kanata townhouse) Be prepared to lose out of multiple properties or grossly overpay for one.
Newbie
Aug 29, 2012
47 posts
18 upvotes
Ottawa
Thanks for the advice everyone! Everything said will greatly help.

It's not a "special" type of home, pretty cookie cutter.
Deal Addict
Jan 15, 2017
3613 posts
2970 upvotes
cbalain wrote: Thanks for the response.

It's not necessarily that I don't trust my agent. But no one is in the business of not making / losing money. Would I rather get paid for all the work I do or just keep doing it and hope that I get something at the end? It can't be easy being a real estate agent.

As a first-time buyer, I'm just trying to make sure I get it right. It is a huge investment after all. It's more of a, "should I just take everything the agent says and go with it", or should I be doing some kind of due diligence by asking certain questions (info on comps in the area, resale, etc...) before going with that strategy?
Always do your due diligence, and asking your questions here is a great option. I would definitely want comps prior to submitting the offer. As there are already two other offers on the home, your agent should have them for you now. I wouldn't wait until after I viewed the home and deciding on whether or not to put in an offer. No reason that you can't read comps prior to viewing the home.

Your agent should also be willing to show you examples of what homes listed for and what they eventually sold for so you can get an idea of the trend in the area. That can help you feel more comfortable in a multiple offer situation.

I do think though as a first time buyer your agent should be offering you all this - not waiting for your requests. Your agent should be preparing you for the situation this evening where you will have to move quickly if you are thinking of putting in an offer.

Good luck.
Deal Fanatic
Jul 4, 2004
5845 posts
1902 upvotes
Ottawa
skeet50 wrote: Always do your due diligence, and asking your questions here is a great option. I would definitely want comps prior to submitting the offer. As there are already two other offers on the home, your agent should have them for you now. I wouldn't wait until after I viewed the home and deciding on whether or not to put in an offer. No reason that you can't read comps prior to viewing the home.

Your agent should also be willing to show you examples of what homes listed for and what they eventually sold for so you can get an idea of the trend in the area. That can help you feel more comfortable in a multiple offer situation.

I do think though as a first time buyer your agent should be offering you all this - not waiting for your requests. Your agent should be preparing you for the situation this evening where you will have to move quickly if you are thinking of putting in an offer.

Good luck.
From your statement, it sounds like you are saying your agent should be able to show you the other offers - just so it's clear, your agent will never be able to show you the other offers.

I'm assuming that you mean comparables not other offers but even those you have to take with a grain of salt. Real Estate is very much dictated by supply and demand. If 3 people want one house, it will likely sell to whoever is willing to pay the most and / or offers the best conditions so comparables might not be that reliable.
Deal Addict
Jan 15, 2017
3613 posts
2970 upvotes
michelb wrote: From your statement, it sounds like you are saying your agent should be able to show you the other offers - just so it's clear, your agent will never be able to show you the other offers.

I'm assuming that you mean comparables not other offers but even those you have to take with a grain of salt. Real Estate is very much dictated by supply and demand. If 3 people want one house, it will likely sell to whoever is willing to pay the most and / or offers the best conditions so comparables might not be that reliable.
Yes, I mean showing the OP comparables now. No, I agree that the OP will not see the other offers.

The Realtor should be providing this information now prior to viewing so he/she has some time to think about what they will like to do should they decide to submit an offer. Submitting an offer right after seeing it without the opportunity to adequately review this information just puts them in a weakened situation.
Deal Addict
Dec 4, 2016
1865 posts
888 upvotes
wiab89 wrote: Ah ok - we're talking different things here. You're talking about overall median, I'm just comparing against similar professions. I like the breakdown and distributions, as a fellow stats nerd I would agree with what you're saying on the average income of a homebuyer in the 2 cities.

Mostly I was just saying that doctors/nurses/pharmacists/engineers/accountants make basically the same in Ottawa as Toronto - of course the top end specialists in each field will probably migrate towards Toronto for opportunities and pay. But I think there is a lot of "untapped" growth potential in the Ottawa market because wages are comparatively high and prices are still within reach of most middle class professionals unlike Toronto.
Professionals in Ottawa do make significantly more in Ottawa than in Vancouver, and perhaps comparable to Toronto, but they are not going to pay Toronto prices for homes in Ottawa, because population density in Ottawa is much lower. They just spend a lower fraction of income on housing and/or live in larger homes, compared to Toronto.
Deal Addict
Dec 4, 2016
1865 posts
888 upvotes
cyberfreak123 wrote: I forgot to mention rising construction costs and development fees. it might be the result of qualified workers shortage , increase material cost and minimum wage hike. My sister works for a civil engineering firm in gatineau and she’s noticed substantial generalized higher costs for public works contracts since a year ago. She said all these increases will translate in higher price for new builds( in Gatineau). Herself she got the highest bump up of her salary since years.
Probably also a catch-up effect. The lack of work in construction between 2012 and 2016 cause a lot of skilled workers to go elsewhere, and it's going to take a while to lure them back.
Deal Fanatic
Jul 4, 2004
5845 posts
1902 upvotes
Ottawa
michelb wrote: There's nothing strange about it; it was simply a flip (and the news articles refers to them as house-flippers). They bought in March, took 7 months to do the renovations, listed in November (arguably asking for too much). It didn't sell, so now are trying this strategy to maximize their return.

As mentioned above, I personally think they did a very nice job on the reno but that doesn't make the house worth $1.1 million. I suspect that they can sell for considerably less than still make a profit but it's too be expected that they want to try to maximize that profit.

I have to agree with you that I suspect they will not sell enough tickets to make this worthwhile. I thought I saw somewhere that they were hoping so sell 50,000 (might have just been in the comments though) and I suspect that they'll cancel the "lottery" if they don't sell 40,000 and I just don't see them selling that many "tickets". If nothing else, I don't have confidence that they'll run this honestly; anyone who knows any teachers knows the amount of time that you have to spent to review essays for a classroom and that's only for around 30. Now imagine how long it would take to review and rate 40,000 essays... I don't think anyone will be reading the majority of the letters. More likely, I suspect they'll just pick a letter at random, read it and if it's reasonable, make that person the winner otherwise pick another letter (or it's certainly possible they don't even actually care about the letter). My issue is that there's certainly a lot of opportunity for abuse and the house could certainly go to a friend or relative.
Not that it's going to come as a big surprise to anyone but the "Win this house" lottery has been cancelled (https://winottawahouse.com/) and the house is back on MLS for $1.13m

Not sure how many entries they received but if nothing else, they got an interest free loan for a while (and there's no timeline given for how fast they'll do the refunds (It just says "Wait for us to refund thousands of participants in accordance with the contest Terms and Condition"). Rather than wait for a refund, they are asking participants if they want to donate their entry to one of the 3 charities the contest holders are supporting (which is not a bad thing to do) although the skeptic in me is wondering who will get the tax receipt for that.
Deal Addict
Jan 15, 2017
3613 posts
2970 upvotes
Anyone have any thoughts on the CHEO Lottery Home? We went to see it today. Lots of people there. I mean lots. There were aspects of the home that were nice, but overall, not nice enough for us to want it or to buy a ticket. We felt the decor and finishing chores were kinda disjointed and for a 3500 square foot home on 2 floors, I was expecting larger bedrooms than the two that share a j&j bathroom.
Member
Jan 12, 2007
374 posts
116 upvotes
Orleans
LOL you're supposed to buy a ticket to support CHEO, not because it's a sound investment.

Having said that, yeah, it's pretty disappointing looking. I remember when the CHEO dream homes used to actually look like dream homes.
Now they're postage stamp lot track houses.

2 car garage? C'mon. Who "dreams" of winning the lottery and moving into a 2 car garage home on the far side of Stittsville?
Sr. Member
Aug 6, 2011
590 posts
261 upvotes
Video showing the CHEO house:


Nice spacious house, but I'm not wow. If I win, I'll sell it. Too far for commuting to downtown.
Deal Addict
Jan 15, 2017
3613 posts
2970 upvotes
97gst wrote: LOL you're supposed to buy a ticket to support CHEO, not because it's a sound investment.

Having said that, yeah, it's pretty disappointing looking. I remember when the CHEO dream homes used to actually look like dream homes.
Now they're postage stamp lot track houses.

2 car garage? C'mon. Who "dreams" of winning the lottery and moving into a 2 car garage home on the far side of Stittsville?
Your comment about the community is spot on. We turned into the community and saw the street of what looked like identical, bland homes and thought there is no way a dream home can be in this neighbourhood.
Deal Addict
Jan 15, 2017
3613 posts
2970 upvotes
cyberfreak123 wrote: Video showing the CHEO house:


Nice spacious house, but I'm not wow. If I win, I'll sell it. Too far for commuting to downtown.
We said we would sell it also - and no way would you get anywhere close to the advertised value of $2.374m.

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