The ever-changing real estate market certainly keeps everyone on their toes. For Rochelle Edwards, The Genuine Realtor who serves communities on the Western Shores of Lake Ontario, there are quite a few important aspects of a shifting market that everyone should know.
She shares some honest insights into a variety of timely real estate topics, including dealing with the risks of overpaying, timing your move right during a market correction, understanding the nuances of real estate statistics, changes in consumer protections, and home affordability.
Risks of Overpaying
While it can be tempting to overpay in order to snag your dream house, it can come with some serious consequences.
“If you make an offer and the bank decides that the property is worth less, you are responsible to cover that appraisal gap. If you can’t come up with the difference, you could ask for an extension from the buyer which will probably come with penalties,” explains Rochelle. “If you aren’t granted an extension and the seller has to find a new buyer, you will lose your deposit and most likely be sued for any difference in the new buyer’s purchase price as well as any additional expenses. This can add up to hundreds of thousands of dollars in losses.”
In order to avoid a serious scenario like this, it is imperative that you work with a trusted Realtor that knows how to protect you and understands how buying and selling real estate works in a variety of situations.
As for sellers, you should also understand the implications if the sale of your home falls through, especially if you are counting on using it as a down payment for your next home. The buyer’s failure to close could have a domino effect that causes you to also fail to close.
As Rochelle says, “The highest price offer is not always the best offer!”
Selling During a Market Correction
One of the trickiest timings when selling and buying a home happens when someone finds their perfect home at the market peak just as it turns and has to sell their home in a more challenging real estate environment.
“In this situation, it is important for sellers to be pragmatic and to price their home competitively. It also helps to work with a Realtor who can work cooperatively with other Realtors to ensure that everyone involved can meet their home ownership goals,” says Rochelle.
Understanding Statistics
The real estate market has been extra news-worthy for the last few years, which means that data and statistics are often used to explain what is happening. The difficulty is that these numbers don’t always reflect what is happening in your local market.
The best way to understand what is happening in your community’s real estate market is to speak with a local Realtor who has real-time, hands-on experience with the shifting markets.
Consumer Protections
Another area of real estate that has been in the news lately includes some stories of bad apple Realtors acting unethically.
“Unfortunately, the likelihood of coming across a bad actor has increased in recent years,” says Rochelle. “The good news is that there are quite a few great Realtors who are working to improve professionalism by bringing back the standards and ethics that the public deserves.”
There are a few changes in the pipeline that should help everyone. A new provincial Trust in Real Estate Act (TRESA) updates the old act to offer better consumer protections and increased transparency. In addition, the Code of Ethics is being reformed to a principal-based approach and increased repercussions for breaking the rules.
Rochelle urges anyone who has had a bad experience with a Realtor to file a complaint with the Real Estate council of Ontario and/or their brokerage.
Home Affordability
Housing prices have almost tripled in the past 10 years while incomes have not nearly matched that growth. Affordable housing is becoming harder and harder to find.
“Affordable housing means 30% or less of your monthly income. In Ontario, that means $23 per hour minimum just to meet the basic cost of living needs,” says Rochelle.
In an effort to increase affordable housing in the province, leaders in organized real estate were appointed a position on the Ontario Housing Affordability Task Force where they took an extensive look at the many facets impacting affordability.
In addition, local governments are trying to reduce red tape and duplication to help speed up the processes for passing permits and adjusting zoning bylaws. Municipalities are also eligible for the Building Homes Faster Fund, which supports increasing the housing supply over the next three years.
Overall, Rochelle expects to see the market softening in prices and an increase in inventory. “There will still be a demand because so many people are trying to get into the market, so it is unlikely that we will see a 90’s-style recession price drop,” she assures.
To learn more about the ever-changing real estate market, visit Rochelle’s website, Rochelle Edwards, The Genuine Realtor®, email [email protected], or call (905) 484-0747.
This article was sponsored by Rochelle Edwards - The Genuine Realtor - S. Todd Real Estate Ltd., a 2023 BurlingtonToday Reader Favourite.
