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Ottawa tops the list for homes selling over asking in Ontario

OceanBonfire

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Let's hope (Hahaha) they're not using the NCR as the baseline in the PLD update (whenever that comes...)

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The report found that Ottawa tops the list for homes selling over asking, with a 27 per cent difference on average.

The average listing price of a home in Ottawa in September was $523,842 but the average selling price was $669,874.

...

 

dimsum

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Houses are definitely selling over asking, but I noticed in Ottawa (and I'm sure elsewhere) that some places purposely set their price low to drive a bidding war. So if, for example, a "standard" listing price for that house/area was $600k, some realtors would list at $550 or even $525k.
 

Bruce Monkhouse

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Or just make the price the actual price. Someone offers asking with no conditions the house is theirs....
 

Remius

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Imagine going to a store to buy something and when you get to the cash they tell you the price went up but you still might not be able to get it because someone else might be offering more.
 

Good2Golf

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Imagine going to a store to buy something and when you get to the cash they tell you the price went up but you still might not be able to get it because someone else might be offering more.
Imagine selling your car, reasonably priced at $5000 OBO.

First guy offers you $3500 (because there are those types), one guy offers $5000 and a third guy offers you $6200 because he appreciates that your car was kept in really good shape and it’s a popular model with low mileage.

Sounds like many here would forego the “Or Best Offer” and take the $5000. I wouldn’t if I weren’t in a rush or I had these multiple offers at the same time…I’d pick the buyer’s offer that I liked the best. Would you tell the $6200 guy that you had a $3500 offer, or even a $5000 offer? I don’t think most here would.

Or a larger scale example…your corporation is bidding on a contract where the submission requires both technical and commercial bids that are deemed acceptable to the contracting agency (Govt, other business, etc.) and let’s say the contracting agency says ‘lowest cost compliant” or “best value” and publishes a set of mandatory and rated requirements but, imagine this, no precise contract value? What does your company do? Complain that the contracting agency doesn’t tell you what the contents of the other bidders’ offers are?

If people don’t want to pay the price of a house that will win the sale, then……here’s a thought…..don’t buy it. Buy something you can afford and that meets your needs.
 

Bluebulldog

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Imagine selling your car, reasonably priced at $5000 OBO.

First guy offers you $3500 (because there are those types), one guy offers $5000 and a third guy offers you $6200 because he appreciates that your car was kept in really good shape and it’s a popular model with low mileage.

Sounds like many here would forego the “Or Best Offer” and take the $5000. I wouldn’t if I weren’t in a rush or I had these multiple offers at the same time…I’d pick the buyer’s offer that I liked the best. Would you tell the $6200 guy that you had a $3500 offer, or even a $5000 offer? I don’t think most here would.

Or a larger scale example…your corporation is bidding on a contract where the submission requires both technical and commercial bids that are deemed acceptable to the contracting agency (Govt, other business, etc.) and let’s say the contracting agency says ‘lowest cost compliant” or “best value” and publishes a set of mandatory and rated requirements but, imagine this, no precise contract value? What does your company do? Complain that the contracting agency doesn’t tell you what the contents of the other bidders’ offers are?

If people don’t want to pay the price of a house that will win the sale, then……here’s a thought…..don’t buy it. Buy something you can afford and that meets your needs.

I think the main difference is the way real estate transactions have changed in the recent past.

Selling a car...you don't get three buyers in front of you at the same time, unless at auction. And if you accepted the $5K offer, you'd likely stick to the deal, even if the $6200 one came in after you agreed. ( Most people with integrity would anyhow).

However, there are some really crummy real estate agents and practices taking place as well.
 

Remius

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Imagine selling your car, reasonably priced at $5000 OBO.

First guy offers you $3500 (because there are those types), one guy offers $5000 and a third guy offers you $6200 because he appreciates that your car was kept in really good shape and it’s a popular model with low mileage.

Sounds like many here would forego the “Or Best Offer” and take the $5000. I wouldn’t if I weren’t in a rush or I had these multiple offers at the same time…I’d pick the buyer’s offer that I liked the best. Would you tell the $6200 guy that you had a $3500 offer, or even a $5000 offer? I don’t think most here would.

Or a larger scale example…your corporation is bidding on a contract where the submission requires both technical and commercial bids that are deemed acceptable to the contracting agency (Govt, other business, etc.) and let’s say the contracting agency says ‘lowest cost compliant” or “best value” and publishes a set of mandatory and rated requirements but, imagine this, no precise contract value? What does your company do? Complain that the contracting agency doesn’t tell you what the contents of the other bidders’ offers are?

If people don’t want to pay the price of a house that will win the sale, then……here’s a thought…..don’t buy it. Buy something you can afford and that meets your needs.
Part of the issue is the lack of transparency. A buyer has no idea what the others are offering. It the case of the car I could just say, well this guy offers me 6200$, can you do better? In house sales you have no idea what the other is offering. It should just be open like any other auction. Show what the best offer is and you can choose to go over it or not.

That is artificially raising the prices of homes.

Your government bidder example is an apples and oranges comparison in reverse. If a homebuyer put out an ad wanting to buy a house and waited for homeowners to make sales pitches on selling theirs then maybe. But that isn’t how it works. Homes go on the market and people shop. Not the other way around.
 

Eaglelord17

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I am not against blind bidding, but there is some reasonable steps that can be made to resolve a lot of these issues.

1) If someone offers your asking price with reasonable conditions (and a home inspection is a reasonable condition), you must accept the offer (Texas has this rule in place and it prevents the insanity we have on the go right now)

2) If the property is a income property you must have a 50% downpayment and you cannot use other properties as collateral/funds for the 50% downpayment.

3) If the home is in a built up area (i.e. Toronto, Vancouver) and it is empty you have to pay a 1k a month tax. Half the issue with housing prices right now is the huge vacancy in the homes we do have, partially caused by foreign investors buying the homes as a commodity not as living space. Reduce the value to them as a commodity and they shall stop 'investing' in our homes.

4) If you sell a house within 5 years of purchasing it any profits made on the home treated as income and taxed accordingly.

5) When the market goes to crash, let it crash. Many are going to get hurt, but that is the price of playing with fire. If the banks gave out bad mortgages that is on them.

The market will sort itself out sooner or later. Once interest rates go up, people won't be able to make payments on these $1M+ Mortgages and they shall have to default. That shall result in higher supply of homes and no one willing to buy in at the ridiculous prices currently there. That means lower purchasing prices.

Right now with the way things are going it looks like we might see a repeat of the 70s and 80s in terms of interest. It is going to be a rough ride for everyone as people are so used to living beyond their means on money they don't have.
 

dangerboy

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I am not against blind bidding, but there is some reasonable steps that can be made to resolve a lot of these issues.



4) If you sell a house within 5 years of purchasing it any profits made on the home treated as income and taxed accordingly.
This would kill me as most of my postings have been under 5 years (the majority 2-4).
 

Bluebulldog

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2) If the property is a income property you must have a 50% downpayment and you cannot use other properties as collateral/funds for the 50% downpayment.
Sounds a bit socialist. Why can one not leverage one's equity to invest?

4) If you sell a house within 5 years of purchasing it any profits made on the home treated as income and taxed accordingly.
That's a heck of a slippery slope. What about those who improve their home using their own sweat equity? Market increase in value is one thing, but buying a home, and then investing say $30K in a kitchen remodel and then paying taxes on their already post tax income investment? Or all the time and effort they spent in improving the property?
 

Good2Golf

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Want to stop misuse of real estate markets? Canada needs to get with the rest of the developed economies and first outlaw real estate purchases by numbered companies. Only G7 country that does it, and leaves real estate wide open for organized crime and uncontrolled foreign buyers.

Legislating that house sales be treated as open auctions won’t solve the problem if the foreign investors, be they honest well-funded buyers, or criminal elements looking to launder money, will still buy the houses for what they’re willing to pay.

So what other than housing should also be legislated as an open auction? Selling your car? Getting rid of that old couch? Maybe an old TV? What else? And if nothing else, then why only housing as an open auction?

If there are any changes to the real estate structure to be legislated, I would start with a diminishing percentage commission model, similar to tax brackets, where higher house price brackets have an exponentially reducing commission rate, e.g. per agent: 2% first $500,000; 1.5% on $500k-$1m; 0.75% on $1m and above, etc.
 

Eaglelord17

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That's a heck of a slippery slope. What about those who improve their home using their own sweat equity? Market increase in value is one thing, but buying a home, and then investing say $30K in a kitchen remodel and then paying taxes on their already post tax income investment? Or all the time and effort they spent in improving the property?
Right now there is people who buy a home, rent it out, proceed to remortgage that home, use it to get the 5% downpayment for the next home, buy that, rent it out, rinse and repeat. If the goal is to cool the market down, this will prevent many people who aren't buying the property for their own uses from participating, thereby reducing the costs for those who actually intend to own the home for personal uses. It isn't Socialist, unless you count any controls on the housing market as Socialist.

House ownership comes with costs, currently I have put over 30k into mine over the last 3 years. The goal would be to discourage those who view our homes as investments not homes from entering the market. Inside many of the hot markets the houses are sold multiple times even before people take possession of them. Why do those people get to make thousands of dollars of income tax free? We already pay taxes on everything else, usually several times, first income tax, then sales tax, plus all the other add on taxes on the way, and when you die you even get estate taxes on all the already taxed income. This one isn't even a guarantee unless you sell within 5 years.

This would kill me as most of my postings have been under 5 years (the majority 2-4).
It would only effect you if you made a profit on the home and even then only the profit would be taxed. Maybe make a exemption in there for people whose primary residence is changing locations (i.e. moving from Toronto to Halifax).
 

FJAG

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4) If you sell a house within 5 years of purchasing it any profits made on the home treated as income and taxed accordingly.
Was on a case in Tax Court on an issue like this. There are already enough factors to distinguish between a real sale transaction vs. a for profit business venture. There's no need for an artificial time rule that would merely create a disadvantage to people who need to move yet reap a fortunate windfall.

Remember that with every such move the person has to buy a replacement house which has undoubtedly also become inflated. Does that create and offsetting tax deduction? What about folks moving into rental accommodation.

The government already digs deeply and unfairly into our pockets to fund their brain farts. Let's not give them more ideas.

I would start with a diminishing percentage commission model,
I used to chuckle at my real estate partners when at our weekly Friday afternoon happy hours they would grouse about real estate agents who had just raked in a six % commission were shopping around town for a lawyer who would reduce his fees for doing the land transfer paperwork for $200. rather than $350.

Honestly, there should be legislated limits on percentage based fees. Manitoba's lawyers were/are under a regulated fee system for estate transactions. It made a lot of sense.

🍻
 

Bluebulldog

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The goal would be to discourage those who view our homes as investments not homes from entering the market.
As a homeowner for over 20 years now, why must it be one or the other?

Now, I am not a "flipper" but I do see a lot of the equity in my home, and if I choose to leverage same, then why shouldn't I?

It isn't Socialist, unless you count any controls on the housing market as Socialist.
I think there is also something to be said for a free market economy, and the ability for people to manage their wealth ( Even if it is in the form of home equity).
 

Bluebulldog

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Honestly, there should be legislated limits on percentage based fees. Manitoba's lawyers were/are under a regulated fee system for estate transactions. It made a lot of sense.
This is by far one of the main reasons for some of the crummy real estate practices that are currently happening.

Different jurisdictions also having different rules, some being absolutely poor. I had an offer in on a home outside Ottawa.

Simple transaction, offered at a price, I accepted the price offered with no conditions....full ask...

Deal went South because the listing agent was "double ending" another deal, and purposefully queered mine....only to find out that the OREA still allows it....and for me to file an objection based on her other duplicitous conduct would just be a waste of resources, with few returns.
 

dapaterson

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Real estate agents make used car salesmen and lawyers look honest by comparison.
 

daftandbarmy

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Real estate agents make used car salesmen and lawyers look honest by comparison.

It's OK, they're still behind (ahead of?) politicians :)


I assume that 'management consultants' didn't make it onto this chart because it was created by one.
 
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