Brett Stein, of Toronto’s Stein Realty Group, said homebuyers now have more bargaining power as lowball offers become more common.
“Right now, I mean, the table is open for negotiations.  Lowball offers are coming in on homes hundreds of thousands of dollars below asking price, and as a seller you can’t be offended.  You have to play ball,” he told CTV News Channel on Thursday.
Stein said the so-called ball is now in the buyer’s court.
“So if you’re a buyer and you see something and there’s not a lot of competition, act quickly and that will give you plenty of opportunity to negotiate.  A lot of people are desperate to sell right now because they’ve already bought their next home and to get that financing, they need to sell and they need to sell fast.”
On Wednesday, the Toronto Regional Real Estate Board said home prices in the GTA fell for the fourth month in a row in June by just over 41 per cent compared to the same month last year.  About 6,500 homes were sold in the Toronto area last month compared to just over 11,000 in June 2021, the TRREB said.
Home sales in June 2022 also fell compared to the previous month as inflation of 7.7% combined with high borrowing costs continue to weigh on the market.  With the latest rate hike on July 6, fixed mortgage rates are now over five percent, compared to less than 2 percent previously.
“Obviously, that’s a huge difference, a huge change in a short period of time.  So of course, as your interest rates go up, your monthly payments go up and buyer confidence goes down.  And as we continue to see interest rates go up and more increases will continue to happen,” Stein said.
With that in mind, he said his “number one” tip for prospective buyers is to sell your current property first, then buy your new one.
“In the market frenzy, everyone was buying first because they know their property would fetch a fantastic sale price,” Stein said.
“Now with things a little more up in the air, sell first, now how much money are you going to put in your pocket.  That way you can budget accordingly for what you’re going to buy.”
Stein said those buying or selling their home should “do the math.”
“If prices are going to keep falling, how much are they going to keep falling?  If you get a $50,000 discount, how does that compare to a 1 percent increase in your interest rate?  So you have to know what your numbers are and what you can afford on a monthly basis,” he said.
“Create that plan with your real estate agent so you can go ahead and attack opportunities because for buyers right now there are opportunities that you can take advantage of.  You really have to, you know, make a conscious decision to wait for the opportunity, instead of waiting indefinitely until a news article comes along that says you should go out and buy.”
Stein also said it might not be the best idea to sell your condo right now, as the market for this type of home is “cold.”
“I have a lot of listings.  I know agents across the TRREB who have a lot of listings that are sitting, that don’t have the exposures that we’re used to and the buyer confidence for condos as they continue to build more and more of these high-rises, demand is low right now.” he said, urging people to either keep their apartment and rent it out or “adjust their price expectations to sell.”
-with files from The Canadian Press