How to win a real estate bidding war

By Mark Weisleder, real estate lawyer in Toronto 

With fewer sellers and high demand for housing in the GTA, bidding wars are back as the spring market gets

under way. But for buyers these auctions are stressful and fraught with dangers, not the least of which is that you

may end up paying too much for a house and go on to regret it.

Here are some things that can help you come out ahead:

1.Research the area to get the low down on the neighbours, schools, parks, demographics and crime rate.

2.Visit with your lender or mortgage broker in advance to get a clear understanding as to what you can afford to

spend in order to buy a property, without having to dramatically change your standard of living.

3.Work with a professional sales person. You need to know the real market value of properties. Many sellers

deliberately list their property at 5 to 25 per cent below market value to bid it up.

4.Conduct a home inspection before submitting the offer, so you can make an offer without conditions. Sellers

prefer this.

5.Do not participate in a faxed offer process. Always insist on having your agent present in person.

6.Put in a deposit with your offer of at least 5 per cent of the price, to demonstrate you are serious. If possible, use

a bank draft.

7.Bid later in the day and give the seller a shorter time to deal with it. That way they will not have the time

generate offers from other buyers.

8.Offer to close the deal faster.

9.Market yourself and your family. Many sellers do care who will be living in their home and taking care of it after

they leave. Explain how you and your family will do this.

10.Be flexible. Offer to close the deal early, but perhaps let the seller stay there for a few weeks, rent free, to more

easily arrange their own move.

11.Know your limit and do not budge from it. Do not get carried away. It is better to walk away and try again on

another property than to seriously overpay.

12.In some cases, sellers indicate they will not accept any offers for two to three days. Bring your offer in early as

the seller will usually want to see it anyways and this may give you an advantage.

13.If you are suspicious about whether there is a competing offer, consider inserting a clause that states that if the

seller does not receive another offer, you will have the option to either cancel or revise yours.

Bidding wars are emotional and stressful. By being properly prepared, you have the best chance of succeeding.

Telus’s Vancouver condos fly off the market

FRANCES BULA - The Globe & Mail

Telus has sold out the first condo development it has ever built, before a planned formal launch in mid-April,

making it the second large Vancouver project to sell out almost instantly in the past month.

“We were tremendously surprised by the interest. It’s been really gratifying for us,” said Andrea Goertz, senior vice-

president for strategic initiatives at the telecommunications company. “I think it speaks to the building’s technology

features, sustainability features and public plaza.

But industry experts say that doesn’t necessarily mean that condo or general real-estate boom times are back.

Instead, they say, it is projects that are close to transit that are winning out.

“Transportation is the new green,” said Tracie McTavish, president of Rennie Marketing, which sold the PCI Marine

Gateway project’s 415 units in a public launch mid-March.

That’s why projects like Marine Gateway, a tower that will be part of an office and entertainment complex at the foot

of Cambie next to a Canada Line station, and Telus Garden, with 428 units in a 53-storey tower a block from

Vancouver’s key downtown intersection, are being gobbled up at a rate not matched elsewhere in the region.

“Some of the more outlying developments aren’t seeing that kind of interest,” said Don Forsgren, president of the

Urban Development Institute, which represents large builders in the region. “The single-family suburban house

market is pretty flat.”

Also flat are sales in Surrey and the northeast Tri-Cities area and lower-rise wood-frame buildings, said

development consultant Bob Ransford.

“It’s all geographic who’s doing well.”

Recent figures from the Real Estate Board of Greater Vancouver compiled by various real-estate analysts indicate

higher numbers for unsold inventory than past years at the same time.

Local sellers all say that it’s not foreign investors driving the market for the successful projects, but local investors

and people planning to live in the condos themselves.

Ms. Goertz said Telus offered its employees priority in sales at Telus Gardens and 150 of them bought, even

though the price discount was a modest one per cent.

The project’s developers, Telus and Westbank Projects, also didn’t allow anyone to buy more than two units.

Mr. Forsgren, whose company Intracorp sold out a tower instantly at Metrotown in May of last year, said the

company has to track buyers closely because of requirements from FINTRAC, the agency that monitors money

laundering and criminal organizations.

The personal information that had to be submitted for those units showed there were only four offshore buyers.

He said he expects Intracorp’s newest tower, Silver, to get about 50 to 60 per cent investors among the 3,000

buyers lined up for it. That’s similar to what Mr. McTavish said was the ratio for Marine Gateway.

But those investors tend to be local investors, people who are buying something for their children to move into

some day and renting it in the meantime, or people who are looking for an investment that’s more stable than the

stock market appears to be right now.

Affordability doesn’t seem to be necessarily at the top of the list for buyers, either. Mr. McTavish said that half of the

40 high-end units in Canada House West, at the former Olympic village in Vancouver, have already sold in the first

two and a half weeks at “very attractive rates” of more than $1,000 a square foot.

That may push the city of Vancouver, which took over the project from the private developer in late 2010, into putting

the other 20 units in Canada House East onto the market.

Telus has also been successful in nailing down a first tenant for the office component of the Telus Gardens

project. The law firm of Bull, Housser and Tupper has committed as a tenant. That means 70 per cent of the office

space, which will include Telus’s head office, is now leased.

Ms. Goertz said the company is negotiating with several other interested tenants and will be releasing details

about those leases shortly.

Renegotiating your mortgage before the term is up

Expert Contributor: Jennifer Coy | goldengirlfinance.ca

Let's say you have a mortgage with a 5-year term, but you're only 3 years into the term. Do you have to wait until the

full 5 years is up before renegotiating (especially given an appealing lower interest rate environment)?

Mortgage expert, Jennifer Coy, provides the following advice:

There are three different categories of mortgages where pre-payment is concerned:

1)     Open mortgages refer to those mortgages open to full pre-payment at any time, without penalty.

Closed mortgages can be broken down into two very distinct categories:

2)     Mortgages that are closed to pre-payment entirely.

3)     Mortgages that are open to pre-payment within certain guidelines.

Most mortgages in the open market are the latter. So, in most cases, you can pre-pay a certain amount without

penalty. Outside of these terms, you would be responsible for paying a penalty, representing some loss of interest to

the lender.

In the specific case of a 5-year mortgage at a higher interest rate than is currently available, you may benefit from

switching to a mortgage with a lower interest rate, despite the penalty you will pay to break the term early.

The best thing you can do is to read your original mortgage agreement, as pre-payment guidelines must be provided

in writing. If the guidelines are unclear, or you need a hand in calculating what your costs might be, don't be afraid to

ask a mortgage professional. Ultimately, you want to search out the mortgage that is best suited to your current

needs.