“[Clients] are kind of rushed to make a decision,” says Celine Xu, an agent with Re/Max Realtron. “That’s why we have several offers for some properties.”
Typical buyers are now revisiting the properties that they once overlooked, especially detached single-family homes in places like Toronto. Homes that require a complete gut – the same ones that investors and property flippers tended to scoop up at a discount – are now more attractive to all buyers due to the severe shortage of listings in many of Canada’s larger cities.
“All I can do is show them what’s available right now,” says Casey Ragan, an agent with Re/Max Hallmark. “There are so many end users that it’s hard to make money. Properties are selling for $100,000 more than they should be. And the end user ends up paying more than the investor who is looking for a return.”
The key, says Ragan, is educating investor clients about the changing market.
“You have to let them know how [the market] is, this is what you’re getting into,” he says. “You have to prepare them. If you don’t, the process is stressful.”
The only other option, Xu says, is attempting to solicit a sale from past clients and other homeowners.
“We try the MLS to see if people are interested in selling their houses,” Xu says. “And we advertise in magazines to get sellers to list their homes.”
The market frenzy caused by a shortage of listings has extended to many investor clients, who find themselves hard-pressed to purchase a property at a decent price – a task that’s set to become even more challenging following the Bank of Canada’s surprising decision to lower interest rates.