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2020 has been an absolutely strange year.  At the beginning of the year (in Winnipeg) at least there were rumblings of the Coronavirus in Asia and I don’t think we were prepared for what the next few months would bring.  With early spring/summer seeing the first cases in Canada and Manitoba there were predictions for the Winnipeg real estate market of a complete decline in sales and home values.  From this REALTOR®’s perspective that couldn’t have been further from the actual scenario.  With homes consistently selling for over list price in multiple offer bidding wars throughout the city it became clear early on that this year would not be the same as many previous.


Winnipeg Realtors Helping in Bidding WarsAs an observation on the market I believe a large proportion of the reason for these bidding wars has been a higher number of people who are currently in a smaller property, whether that be renting an apartment, or just living in a smaller home have realized that they wanted something with some more space to allow for working from home, home schooling and general isolation due to our situation with the coronavirus. This has brought out a massive demand for similar property options around Winnipeg, while the amount of homes actually going up for sale has decreased approximately 30% on average compared to 2019.  This has limited the amount of options available to the people looking to purchase and has created our heated bidding and offer system, and also increasing home prices significantly versus the same time last year.


That being said we have also seen issues with appraisal values due to the overpayment of properties, we have seen plenty of banks who offered pre-approvals not give financing to the same clients after an offer was presented on homes.  It seems like even though there is demand for homes there are still barriers to entry into the market during this pandemic. 


Some things to note during this pandemic are that the real estate industry is listed as an essential service and as such we are still operating, but not as usual.  Some of the new systems in place during this pandemic include new guidelines and rules for how to view a property, who can view a property and also when you can view a property.  Below are some guidelines for potential purchasers or sellers that have changed due to the Coronavirus:


1. PREAPPROVAL

  • If you want to tour a property, ensure you have a valid, recent (withing the last 1-2 months) pre-approval in place.  Agents are required to pre-qualify buyers before showing them a property and it is in your best interest to know what you can afford especially with all of the bidding wars happening on properties

2. WHO can view a home?

  • The Winnipeg Realtors rules for viewing homes have changed and only 2 people (not including the realtor) are allowed in a home at a viewing.  Also, only the people who are going to be on title for the home should be viewing the property.

3. When can you view a property?

  • With the new COVID-19 rules we as realtors are not allowed to overlap any showings with other groups.  This means that now you are required to book a viewing (in 30 min intervals) and to go through the property as quickly as possible.  The goal is to limit the amount of touching and overlap between people in any given property.

4. Additional requirements

  • Some additional requirements for viewing properties include a requirement to fill out a COVID-19 declaration form.  This for is required for EACH viewing of any home. If you view 5 homes you need to complete 5 disclosures.  These ensure that you are healthy, have not had an opportunity to trace infect yourself or anyone else if you have been exposed to the coronavirus.


The big things to take away from this new system is to get yourself pre-approved prior to any requests with a realtor, ensure that if you are sick you are not viewing properties, and to not unnecessarily tour properties during the pandemic.


If you have any real estate related questions about the new rules, or want to know any other information on the current market feel free to contact us. 


Top Realtor in Winnipeg Logan Queen#AgentLogan


Logan Queen

Tel: (204) 226-1261
Email: Logan@JenniferQueen.com

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If you’ve been following Winnipeg’s real estate market at all these past few months, you’ve noticed a high percentage of homes are selling over the asking price. You may be wondering, how are there so many buyers that are willing to pay more than what the owners have asked for!? The simple answer: The law of supply and demand.

What is the law of supply and demand? It is a simple economic theory where when demand exceeds supply, prices will rise, and vice versa. How this applies to the real estate market is when there is a surplus of buyers who are looking in a specific neighborhood and there is shortage of homes for sale in that specific neighborhood, the prices of homes will rise due to demand. Resulting in, yes, you’ve guessed right, every buyer’s worst nightmare: the bidding war.



If you are thinking of buying a home in the near future there are some things you can do to prepare yourself in the event that you may encounter a multiple offer scenario.



 

Mortgaeg pre-approvalFirst Off, Get Pre-Approved. 

Being confident in how much you can afford when competing gives you a huge advantage. This will allow you to feel comfortable with the number you put down on that offer… even if it may be $40,000.00 over asking! Secondly, the time necessary for the lender to approve your mortgage will be cut down drastically, allowing you to put a much shorter time to fulfill your financing condition, making your offer a lot stronger. It is not uncommon to see offers written with 24 hour financing conditions or even no financing condition at all! If you want to compete with those offers, having a dialogue with your lender as well as the pre-approval will give you the tools necessary to do so.


(It is very important that if you decided to write an unconditional offer you ask your mortgage specialist/broker and your realtor all the risks involved in doing so).  A pre-approval means the lender has already done approximately 70% of the work, but still has a few key pieces that they require to get the final approval.


Know Your Market.

This is where you need to listen to your realtor. Find someone who is familiar with the areas you are looking in. See how many homes in that area have gone over list and by how much. This will give you somewhat of an idea to what you may experience when it comes time to put in an offer. Although every situation is different, being educated in what trends are happening in your neighborhood will help you prepare and will hopefully reduce some of the stress involved with these multiple offer scenarios. An educated buyer is the best kind of buyer!


Know the Market Value of the Home.

Comparative Market Analysis Winnipeg

Market value is defined as “the price an educated buyer is willing to pay for a specific property”. In a “hot market” properties may be listed lower than market value to attract more buyers.  Your agent should be doing a ‘Comparative Market Analysis’ on the property to determine market value so you can make an educated offer. This is not to say properties don’t go above market value, there are many factors that go into what something is worth to someone. It may be that it is next door to their best friend or maybe they just NEED it. It is hard to know what a specific property will sell for, you need to determine not only market value, but what the home is worth to YOU.


Have a Plan.

Bidding wars are stressful, no doubt about it. Talk with your agent about all likely scenarios and what you would be willing to negotiate on. Knowing your numbers before they present offers helps to keep emotions out of it. Keep in mind, in Manitoba your agent does not know what the other offers are and what situations may be associated with them. For all we know, the offer you are competing against could be the owner’s sister. Plans change, but having the discussions beforehand will help ease your emotions at that time.


Write a Letter to the Seller.

Some may say this is a little tacky, but from experience, these have been known to sway sellers in different directions. Read more about the power of a personal letter in #AgentLogan’s previous blog. Let them know what you love about their home, who you are and what you value. Connecting with the home owner may just help get you in the front running to negotiations, its worth a try!


Home Inspections in WinnipegDo a Pre-Inspection of the Property.

The less conditions on an offer, the stronger it is when competing. Putting a condition subject to a home inspection can result in your offer going to the bottom of the pile. This is not to say we shouldn’t do one! Usually, there is enough time before the offers date that you can schedule a pre-inspection of the property, allowing you to write an offer without the home inspection condition but still being confident in the purchase you are making. The only downside to this is if you still don’t get the property you’ve paid for the home inspection!


Be Patient.

The last piece of advice I will give you is be patient. It is not uncommon to write 4-6 offers before finally getting the house you’ve always wanted. This a marathon, not a sprint. I have experienced MANY multiple offer scenarios in my career as a real estate agent, they are all different and they are all unpredictable. Having the tools necessary in advance and the right guidance is key to navigating these crazy things called bidding wars.


Good luck!


Ashton's Advice on Bidding Wars#AgentAshton


Ashton Augert

Phone: (204) 781-1767
Email: Ashton@JenniferQueen.com

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