COVID and the housing market | Page 90 | GTAMotorcycle.com

COVID and the housing market

GreyGhost said:
I saw another interesting mess caused by the crazy market. A rural house was listed in January 2021 for 849K. Sold conditional (I don't know for how much). The interesting thing I hadn't seen before was the condition was the seller had to find a suitable house to buy (backwards from the normal situation where you are waiting for the buyers house to sell). Seller got outbid on a few houses and terminated the deal at the end of February. Relisted for 899K this week. wtf. So the buyer was tied up thinking they had a house for over a month while the market continued to reach for the sky and then got their deposit back and told good luck. I have no idea if the seller has found another house or whether they will play the same game again and keep someone on the hook while they search.
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That's something I never thought of and it would work for me. I get max price for my place without a commitment to sell and know what I have in my pocket as I shop. It sounds legal but the ethics suck.

It has a drawback. If my house went up in value I couldn't reap the gain unless I jerked the buyer around. If I got more for my place it changes my shopping list. It's wanting to have your cake and eat it too.
 
GreyGhost said:
I saw another interesting mess caused by the crazy market. A rural house was listed in January 2021 for 849K. Sold conditional (I don't know for how much). The interesting thing I hadn't seen before was the condition was the seller had to find a suitable house to buy (backwards from the normal situation where you are waiting for the buyers house to sell). Seller got outbid on a few houses and terminated the deal at the end of February. Relisted for 899K this week. wtf. So the buyer was tied up thinking they had a house for over a month while the market continued to reach for the sky and then got their deposit back and told good luck. I have no idea if the seller has found another house or whether they will play the same game again and keep someone on the hook while they search.
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I got thinking about this and thought I'd kick the can down the road a bit.

Assume the seller has a half million to put into the pot and is looking for a $1.4 M place.

Let's say his place goes for $950 K, $50K over so he know can shop in the next bracket up which is $1.4 to $1.5 M, He sees a place for $1.5M and makes a conditional offer based on the sale of his place.

Then he goes to the buyer of his place and says he can't complete the deal unless he gets another $50K. If that guy can only up his price $25K Mr. Wheeler Dealer goes to the guy with the $1.5 M house and sees if he will take $25 K less.

He's protected on both ends so little to lose

It sounds like a crap show but the market has been that way for a bit, escalating with covid.

I can understand his position. How many buyers have monster wallets to cover market ping pong ball pricing?

Could it be the future?

How many properties could be in the chain?

I used to think if someone offered something for sale and a buyer agreed to the price and all conditions it was a done deal. Apparently the sales contracts have a lot of flexibility built in. In some other countries I've seen prices listed as "Offers on $XXXXXXX" basically the reserve bid at an auction
 
nobbie48 said:
That's something I never thought of and it would work for me. I get max price for my place without a commitment to sell and know what I have in my pocket as I shop. It sounds legal but the ethics suck.

It has a drawback. If my house went up in value I couldn't reap the gain unless I jerked the buyer around. If I got more for my place it changes my shopping list. It's wanting to have your cake and eat it too.
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My sister and BIL did that. Bought a house on the condition they sell theirs. However, the seller had the option to keep the house listed until they firmed up.

If the seller had an offer on the house, higher or lower, sister had 24h to firm up.

sis didn’t sell her house, other seller didn’t sell their house. They all walked with no issue.
 
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Market seems to be slowing down a bit farther out in the east end where we are. We'll see if that continues. Neighbour who's just finishing building his house and said they were staying now having thoughts of selling in the hot market and will be listing soon. Don't think he's thought through the capital gains issue but if he gets a great price that's a mute point.
 
mimico_polak said:
My sister and BIL did that. Bought a house on the condition they sell theirs. However, the seller had the option to keep the house listed until they firmed up.

If the seller had an offer on the house, higher or lower, sister had 24h to firm up.

sis didn’t sell her house, other seller didn’t sell their house. They all walked with no issue.
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In a competitive market the conditional offer can be used as a tool by the agent. A conditional offer is accepted at $1 Million and the agent peddles the price to someone without the need to sell theirs.

We lost a house on that but it was a blessing years later. Nice house but some recent condo proposals will make traffic and parking a nightmare.

I was talking to my lawyer yesterday and he said the seller's condition that he finds a suitable new place wasn't new. TBH it makes sense in this whacko market. He also mentioned the claims by the realtors that the house sold XX% over list were largely BS. The houses were often listed below market value to get traffic.
 
“sold over asking” means nothing. List a house for 500k in a neighbourhood of 1M homes and shockingly you have ‘500k over asking’....

Im curious to see what happens June 1 with some new rules coming it. Real buyers will be the most hurt as the flippers and contractors can get around the rules easily.
 
mimico_polak said:
My sister and BIL did that. Bought a house on the condition they sell theirs. However, the seller had the option to keep the house listed until they firmed up.

If the seller had an offer on the house, higher or lower, sister had 24h to firm up.

sis didn’t sell her house, other seller didn’t sell their house. They all walked with no issue.
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We had this condition with the house we bought in Dec 2019. We had 5 weeks to get a firm offer on our current home and the sellers of the house we were buying were still able to keep theirs on the market until we dropped that condition.
In the end, we sold our house and the deal went through. Everyone walked away happy.
 
Katatonic said:
We had this condition with the house we bought in Dec 2019. We had 5 weeks to get a firm offer on our current home and the sellers of the house we were buying were still able to keep theirs on the market until we dropped that condition.
In the end, we sold our house and the deal went through. Everyone walked away happy.
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That's the normal way that is commonly done not the backwards way. The backwards way has you selling your old house with a condition that you need to find somewhere to buy. In most RE contracts, the buyers are the ones asking for and clearing conditions, in this case the sellers are asking for and clearing a condition.
 
22% of newly-issued mortgages in Canada have a loan to income ratio of 450% or greater. Holy crap that's a lot of money. Those 22% are the ones that will get in trouble if rates rise much.

ca.finance.yahoo.com

Bank of Canada concerned about mortgages, rapid rise in home prices: review

However, the central bank says signs of personal bankruptcies are low, mainly because of exceptional government support.
ca.finance.yahoo.com ca.finance.yahoo.com
 
GreyGhost said:
22% of newly-issued mortgages in Canada have a loan to income ratio of 450% or greater. Holy crap that's a lot of money. Those 22% are the ones that will get in trouble if rates rise much.

ca.finance.yahoo.com

Bank of Canada concerned about mortgages, rapid rise in home prices: review

However, the central bank says signs of personal bankruptcies are low, mainly because of exceptional government support.
ca.finance.yahoo.com ca.finance.yahoo.com
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Don’t worry...’exceptional govt support’ has your back. Nothing to see here....let’s just keep this blindfold on as we continue down this rocky path. Let the next generation deal with the fallout.

EDIT: Anyway...saying you’re concerned and doing something about it are completely different things.

Im concerned about my gut, but that bread and beer aren’t going to consume themselves!
 
mimico_polak said:
Don’t worry...’exceptional govt support’ has your back. Nothing to see here....let’s just keep this blindfold on as we continue down this rocky path. Let the next generation deal with the fallout.

EDIT: Anyway...saying you’re concerned and doing something about it are completely different things.

Im concerned about my gut, but that bread and beer aren’t going to consume themselves!
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It's interesting being on this side of a "too big to fail" industry. Normally I am on the loser side. I would prefer if gov't didn't try to pick winners and losers at all as they suck at it.
 
GreyGhost said:
It's interesting being on this side of a "too big to fail" industry. Normally I am on the loser side. I would prefer if gov't didn't try to pick winners and losers at all as they suck at it.
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Agreed 100%
 
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