Every week, as I scour through the most recent sales, I notice the outliers first: the properties that either over or under sold relative to the majority. When working as a buyer agent, part of my job is to predict which properties will, in the end, offer the best value to my buyer. Which ones will offer the biggest bang for the buck.
What a value buy looks like changes over time, as priorities of buyers shift in a fluid market. But by observing and understanding recent precedent, I can readily spot emerging trends, market shifts and most importantly, the current value buy.
As a buyer in Toronto, it’s worthwhile developing the discipline of focusing on the property that will in the end offer the most for the least. Being able to quickly discard the belles of the ball that are bound to sell for more than they’re worth on paper, is helpful when properties are on the market for a only a week or less. This can be a hard thing to do, especially when the list price is simply a market position designed to entice and not the slightest bit accurate.
What value properties look like now, tend to fall in at least one of the categories below, but the common thread behind them all is this:
They are not what, where or when most buyers (your competition) are looking.
Since we’re in the spring market, ‘when’ most buyers are out, I’ll focus on the first two: the ‘what’ and ‘where’ others aren’t.
If you’re holding out for that elusive deal…
look just beyond typical, top price brackets that almost everyone uses
Most would-be buyers set their cap price in obvious round numbers, as in ‘we can’t go past 1 million’, or ‘we’re looking in the 1.5 to 2 mil range tops’. What happens to those properties that are priced just beyond those common brackets, as in $1.529 million? The competition slims down when the property doesn’t even enter other buyers’ automatic search parameters.
look for non conforming properties
How many people are looking for a small fixer upper semi in Rosedale, do you think? If you were, you may well be the only one. Seriously. Since buyers looking in Rosedale are generally looking to live large and detached, and those looking for a small, fixer upper semi are generally looking in other more affordable neighbourhoods. The market visibility to those already on searches of such a property is greatly reduced. Those already looking in the neighbourhood don’t want what’s for sale, and those who would want what’s for sale, aren’t looking for it there, in that expensive a neighbourhood…Bingo!
look at ones that have problems that make others nervous
While every property comes with its own list of hurdles for buyers to deal with or overcome, the hurdles that make people nervous about the unknown, can seriously impact sale price. Being near a potential construction site for example, can impair a property in the short term. Being the one willing to deal (ideal for those who don’t work from home) will earn you serious buyer power.
look at the ugly ones
I love encountering a great house with an ugly facade. Most people who would otherwise love it, have already ruled it out before the second photo! I just visited one of those today, in fact. What a GREAT house that I’m certain won’t fetch what it’s worth. For one reason only. The facade.
look at small
Many people equal value with square footage, so if you’re willing to go smaller than a 3 bedroom house, you’ll likely get a substantial upshot in location and condition.
look at overpriced properties
Overpriced properties generally do not attract their rightful buyer. They do not project value compared to others in the market, so they’re overlooked, and then granted the moniker of ‘the house with something wrong with it’. Eventually, if the seller is motivated, a price reduction will have to happen to sell. Bonus points for offering before that price reduction goes public!
look at the ones where the listing agent is pooching it
Overpricing isn’t the only way a realtor can screw things up for their seller. Bad or non existent photography, inaccurate descriptions that set buyers up for disappointment, too many showing restrictions for timely visits … all of these help keep the end price down.
look at properties without parking
For many, a property without parking is a deal breaker. It follows that those without it are often less competitive. I’d say it’s one of the easiest ways to get more house for the money.