Written by Treat Hull
Photos Courtesy of the county REAL ESTATE CO.
PART 2 OF AN 8 PART SERIES ON THINGS TO KNOW BEFORE BUYING OR RENTING IN PRINCE EDWARD COUNTY
The laws governing real estate sales are the same across the province, but the actual day-to-day practices vary a lot from place to place.
This is especially true when people are coming from a big city like Toronto to buy real estate in a small, rural market like Prince Edward County.
In this article I want to draw on my own experiences as a real estate broker and that of two of my colleagues to address of the most common big-city misconceptions about buying real estate here.
How much over listing price will we have to pay?
Certainly the most common misconception I run into as a real estate broker concerns the room to negotiate price here in the County: many people from the Toronto area almost automatically assume that you have to pay over listing price or more to make a successful offer here.
Real estate broker Stephanie Solokowski reports that she frequently hears the same thing. “People ask me all the time if they’re going to have to pay over asking price. I tell them you can’t jump to that kind of conclusion. Of course, it depends on the specific circumstance, but generally prices here are open to some negotiation.”
My statistical analysis bears this out: less than one in five of the homes sold on MLS this year sold over asking price.
On the other hand, don’t assume that what you see on real estate TV is true, where flippers buy homes at deep discounts and then sell them in a matter of months for handsome profits. Most homes in the County sell within a few percent of asking price and only a few homes sell for 90% of listing price or less.
It’s been on the market for 30 days…is there a problem?
Buyers from big cities are often concerned that there’s a
problem with a house because it’s been on the market a long time by the urban standards they’re familiar with.
The reality is that in a small, rural market, homes take longer to sell. Broker Shannon Warr-Hunter (http://ilovethecounty.com/) says “I frequently hear people say ‘it’s been on the market 30 days, there must be some kind of problem’. In fact, houses here have recently been on the market for an average of 60 days, and even then, some great houses can take longer to sell.”
Where Can I Find A Good Deal on Waterfront?
Price Edward County is an island and much of the marketing for the County centres on the fact it’s surrounded by water, so it’s probably not surprising that many people coming looking for a “deal” on waterfront.
The reality is that waterfront is in high demand and the supply is limited, with the result that deals are far and few between.
Shannon Warr-Hunter reports that “Sometimes I hear people say, ‘I want a nice place with three bedrooms and two baths on the water and I’ve got a budget of $450,000’. I have to let them know that that’s not realistic and help them clarify what are their real ‘must haves’ as opposed to ‘like to haves’ so they can find an effective compromise.”
In addition to these most common misconceptions, two of the other misconceptions I encounter with buyers concern deposits and conditions.
Do I need to make a 20% deposit?
When making an offer in places like Toronto, there’s an expectation that the buyer will supply a deposit that’s 20% to 30% of the purchase price.
On the other hand, until five years ago you could buy a house in the County with a couple of thousand dollars as your deposit – less than 1% of the purchase price.
Things have changed somewhat since the hot market of 2016-17, but we’re still a small -town market where five to ten thousand dollars is usually more than adequate as a deposit.
You can also forget about the need for a certified check or bank draft for your deposit. A personal cheque will almost always do here.
Do I need to make an unconditional offer?
Unconditional offers may have been commonplace in Toronto at the height of the 2016-17 boom, but fortunately for buyers, they were never common here.
Sellers generally take it for granted that offers will be conditional on inspection, and many successful offers contain a mortgage condition. There are many other different conditions that are included in local offers depending on the specific circumstances. The bottom line is that reasonable conditions do not automatically lead to rejected offers here.
Don’t assume that what applies in Toronto or another big city automatically applies to real estate here in the County, so it’s important to work with a local representative with in-depth knowledge of our local market.
Treat Hull is Broker of Record and owner of Treat Hull & Associates Ltd., a Prince Edward County real estate brokerage which takes no listings and represents only buyers. For more information, visit www.treathull.ca.