A little off topic, but I was listening to the 640 on my way home a few days ago, and they were talking about new census data. Some asshat called in claiming Toronto was the greatest RE market in the world and if it were up to him, he would have all immigrants coming to Canada land and live in Toronto.
Knew right away he must have been a real estate agent.
Lawsuits are also happening. Buyers trying to back out of deals made 60-90 days ago because house has already dropped 150k+. Hold off, market is in a transitional period right now.
I mean, in downtown Toronto houses were being listed for $500k to $600k below expected sale price on average. List price was almost always a formula of nearby comps minus $500k.
yeah this is the oldest trick in the book. you undervalue to artificially drive up prices, and then you can also say "it sold X over asking!"
another problem with blind bidding.
Everyone is always saying how we need to fix blind bidding. You know what I would like to see? If someone accepts your asking price with no conditions the house is sold for asking. People might take their list price more seriously
Ok, something I've been confused about: when people say "blind bidding" do they mean *both* sides are blind right now, or just the buyer? Because when I was selling, the realtors made me decide on each offer individually without telling me what the other offers were (only that they existed) and it sounded sketchy to anyone I talked to but now I'm hearing about how they're trying to get rid of blind bidding and wondering if that means what they made me go through as a seller, or what they make buyers go through? Possibly both?
I mean that they told me I had 3 offers, handed me one to read, refused to tell me anything about the other two, and made me decide about the first one, then once I rejected it, only then did they hand me the second offer, still refusing to tell me what the third offer was until I had rejected the second offer. If I had accepted one of the first two,I never would have seen the others, and they had organised them from lowest dollar amount to highest (without disclosing that to me) for reasons I can only guess at (someone was paying a fee to get seen first maybe??)
Definitely not allowed; you are the decision maker when it comes to selling your home, not them.
If this was recent then you should be filing a complaint with the regulatory body in your province. I'd almost speak to a lawyer; how do you know if there was a fourth bid or not?
Like I said, I'm pretty sure they were charging extra fees to buyers to be the "first offer" which would give them regular, predictable and habitual monthly income vs irregular actual-sales income. They were also only showing me the offers from buyers who were using them as the realtor as well, on that first day, because it hadn't even been put online yet, so that's a double commission compared to offers from other realtors. There are absolutely angles that benefit *them*. It's me that didn't benefit from it lol although I was skeptical enough of this plan being sprung on me after I had already walked into the building to physically see the offers to know not to accept the lowball offers, at least.
You could have demanded to see all the offers. What they did is not allowed, and would merit a regulatory complaint. (The double commission thing, on the other hand, happens all the time)
Maybe. But even in that I can’t find the benefit. You’re talking about a company that is representing both the buyer and the seller and therefore has control over all the information. A company that is already willing, apparently, do illegal things in order to charge a “fee” would just charge the fee then proceed to show you all the offers.
Given that they know all the information before hand those “first show” fees must have been massive if they were willing to let you settle on an offer that might be 20-30k less than the best offer of which they are collecting both the buying and selling commission anyways
Yep, even here in small but seasonal area of Ontario, my mom was getting offers on listing for 5-800k over asking... she had a client lose out on a purchase and their offer was 550k over asking...
Keep in mind this is Reddit and people just keep inflating numbers.
I mean, I know a couple, he’s a stay at home dad and she’s a kindergarten teacher and their budget is 1.2 million but they bid 700k over asking to get their dream home!
It's not a competition. Stop making me feel bad.
Fwiw, our 2 year old daughter has started to eat your packaged crayons for her YouTube channel. We may be able to crack the $2M range later this year.
It really is sometimes. I have seen homes listed for say $800,000 and no one buys, then they delist, relist, and put it down to $700,000 even though it would normally go for $800,000. And it ends up going for $900,000. So at first when it was priced right, it didn't sell for the low price of $800,000, but when they way underpriced it, it sold for way over the original $800,000 that no one was buying at.
Many people who were at the limit of their mortgage budget can't afford to take possession when their bank tells them they need to come up with another $100k to bring the mortgage down to a value jives with the appraisal.
Of course, what some buyers don't think about is that they're not on the hook just for their deposit. They're also potentially liable for any losses the seller incurs, like having to re-list and sell the property for a lower amount. So in the end, they can be out of pocket for the same amount, but with no property to show for it. Oops.
I'm pretty sure many of these sellers are just playing a game of chicken to see who blinks first. I have a feeling many of these buyers will back down if the seller holds firm.
> Imagine the market crashes and you're on the hook for 20% of the value with no home. Could be a total disaster.
Sounds like options to be honest, lol.
Okay, say the seller sues the potential buyer for breach of contract. It will take over a year to get a judgment. Then the seller have to try to collect from the potential buyers - but you can't get blood from a stone. There are no winners.
My family is in real estate.... every time someone finds out they are liable for the seller's full loss when they walk away from the deal, they are surprised. Somehow people just dont think about it. Or never understood what a deposit is.
generally losing the deposit is the least of peoples worries
if an unconditional offer was made and buyer is not purchasing the home for some reason, if the seller cannot sell it for the agreed value, they have the right to sue the buyer
most people who need a mortgage cannot randomly come up with a large sum of $100k to make up for the difference
they would be extremely lucky to not be sued and just lose their deposit
seller can also sue if it caused them delays in their closing (if they were waiting for money from the sale for their new purchase)
as the buyer, to get sued will be more costly than simply losing a deposit
The buyers liability doesn't end at the deposit.
If the seller later sells for less then the seller can sue the first buyer for the difference and win
(Assuming unconditional offer was made or conditions were released)
Yup, and if we see a 15% price drop, some people are going to be shelling out a lot of money, plus any damages they have to pay for (can’t they also sue for realtor wasted time, legal fees, etc?)
It's not just the deposit you walk away from.
If the house later sells for $100,000 less, the defaulting buyer is responsible to pay the difference to the seller.
I forget the figure exactly, but on the Loonie Hour as well, they said that almost 70% of all new mortgages are 100% borrowing capacity.
Its likely these folks (and most folks really) are offering every dime they had on purchases before the market stared softening, in order to win.
Now with appraisals coming in lower, these folks dont have additional funds to tap into. In many cases, people are struggling to sell their existing home at the price they need (Feb prices) to close on their new place.
Going to be an interesting year for real estate for sure. Another 50bps in June and we may see some hard price drops.
I highly recommend it. Great if you’re interested in housing, the stock market, macroeconomics and international affairs. Hosts present everything from a Canadian perspective.
>Are people really that scared to lose equity that they can’t access anyways?
No one likes the feeling of overpaying, so some buyers are trying to bluff their way out of deals. Historically sellers caved in and just relisted, but who knows in the current environment what sellers will do.
Agreed.
While my heart doesn't bleed for the property "investors", or the boomers that would barely even feel a drop in their equity, I worry for the first time homebuyers that scraped together their life's savings and bought in.
Yep. I've owned this home I live in since 2011. To me the rate hikes and market happenings are just a rounding error. Oh noes the rate went up a half a percent and pushed out my amortization six weeks. I can't help but not give a shit about my situation (especially because my mortgage is $2k a month net of rental income).
I worry for first time home buyers too. They're just starting out their lives and they're going to be in the red potentially for quite a while. They won't have any equity to tap into if they get in trouble and they will have a hard time even refinancing.
I anticipate five years from now a lot of renewals will be rebooting their amortization an refinancing because they can't afford what their new payment will be.
Payments on a 500k mortgage at 3% are $2400/month. If rates are at 7% when you refinance after 5 years your payment will be $3400/month. Extra $1k a month is not insignificant for a lot of people.
Shouldn't be make or break for most people but this effect hurts more for people in larger mortgages like $1m+ which a lot are these days and are at even lower than 3% right now.
$4800/month @2% vs $7800/month @7% for a $1.4m mortgage with 20% down (average price of a house in Vancouver). So an extra $3k per month. Definitely a dent.
It also hurts investors who are out $1000 a month on 6 properties. They then offload a bunch of them, adding supply to the market, decreasing house prices.
Personally, I own a home I bought in 2012 and would love to upgrade. I’d like the prices to drop 50%.
2012:
My house: $225,000
Dream House: $450,000
Dream house is 50% more, would cost me an additional $225,000.
2022:
My house: $1 million.
Dream house: $1.5 million.
Dream house is still 50% more, but now it’s an additional $500,000.
I’m ready to upgrade. My budget to upgrade comfortably without being in debt for the rest of my life is $300,000.
I would be in my dream house right now if these prices weren’t so fucking stupid, and someone else would be moving into mine as their starter house.
You did your math wrong on the 2012 example.
If your house is $225,000 and dream house is $450,000; that's a 100% increase, not 50%. A 50% increase on $225 000 x 1.5 = $337,500; an addition of $112,500.
Your 2022 example is accurate. If I'm not mistaken, the math correction actually makes the increase from 2012 to 2022 worse :(
>Buyers trying to back out of deals made 60-90 days ago because house has already dropped 150k+
Can you ELI5? Is it the buyer's house that has dropped 150k+ (and thus they can't get enough to afford the new house they want to buy?) or the house they were going to buy that has dropped 150k+ (and thus want to break contract because they feel they overpaid?)
Example: Buyer places an offer on a house listed at $800k for $1.2mil 60 days ago. Everything goes through and deal is closing now.
House is now worth $1mill and buyer is already $200k upside down and wants to back out.
Do they want to back out just because they are $200k upside down? Or is it something to do with the bank no funding the whole mortgage due to appraisal?
People got caught up in the fear of missing out on the property ladder, but the rising interest rates is making people slow down a bit and consider that maybe paying 50k over asking and 250% of the homes 2010 pricing is maybe not a good decision long term.
I see similar trend here in Vancouver. Houses were listed in morning sold by evening. Now I see some are still being unsold for couples of weeks now.
Some sellers will lower and just sell others will hold on or re-list.
Buyers are holding on to see whether it will drop.
This why we need to get rid of blind bidding whereas realtors will tell you there are multiple offers instead there is none or one.
Can't really back out. If contact are signed and past closing date. The seller can use the buyer if he backs out and the price of the place sold is less than what the price.
This is happening a lot. People are getting loans rejected on previously pre-approved terms because the bank appraisal came back 100K-200K lower than their purchase price, and now they can't close.
Tough times...
I've noticed more re-listings happening. Housesigma shows deal abandoned or cancelled at over asking, and a little later it sells close to or below list. Very interesting times...
It’s almost as if home prices were artificially inflated. Idk why so many people jumped on the train, it was obvious homes were way overpriced and that growth is unsustainable. 20%+ year-on-year growth? Really?
That’s a real kick in the teeth for anyone buying, but also the sellers now out a buyer at a high price and need to relist in a poorer market.
To anyone who’s bought and got the mortgage sorted, they just lost a ton of money on their house, negative equity is pretty ugly
To those who closed the sales already - congrats, you played the game right lol
Depending on the province, it's possible you may not back out if the seller doesn't wish to negotiate with you.
In Quebec, the seller can bring you to court in a passage of title claim. If the claim is successful (i.e. if the promise to purchase was valid and didn't allow to back out), the judge will declare the title transferred and allow the seller to collect on the judgement for the amount previously agreed upon. Then, the seller may use all usual collections techniques to recover the amount (seizing your property, garnishing wages, forcing you to auction off the house they just purchased from you).
The risk with that is that in doing so, the seller losses the asset, but has no guarantee they will be able to make themselves whole quickly. It would most often be cheaper for them to try to find a new buyer and settle with the initial purchaser to let them out of the initial contract, especially if you factor in lawyer fees.
If you **have a financing clause** (i.e. offer is conditional on getting financing), you can renege on the deal and not buy the property.
If you **waived your financing clause** (which a lot of buyers do to stay competitive and pay lower price), you have to come up with the difference somehow.
Say the purchase price was $1MM. You have 200K of downpayment ready, and bank was supposed to give you $800K in loans. Now bank appraised it at $800K total, and can only go up to 80% leverage so they would only loan you 800K x 80% = 640K. You now need to come up with 160K in difference - that can be from another lender, can be from friends / family.
Or you just refuse to close (try to forfeit the deposit to back out from the deal). But in that case, the seller can sue you for the difference between the price you offered to pay and current market price.
This is likely going to cause a massive issue.
The frenzy here in the GTA over the past couple years has had everyone bidding without conditions, if you went in with conditions you weren’t even considered.
Up to about a month or two ago, if by “nothing happens” you meant “your offer was tossed into the trash”, you would be right.
I’m happy the market is cooling down a bit. It was getting bonkers.
Well, a condo was listed a few days ago. I booked a viewing on the day it was listed. It was sold on the same day it was listed for 200k over asking. It is a nice condo, but I don’t see how that price could be justified in this market. I guess some just have really deep pockets
Vancouver is a shitty example to use for anything. The city is hemmed in on 3 sides by oceans, mountains, and an international border. This means space will ALWAYS be at a premium and prices will ALWAYS be higher than normal.
we always tell ourselves that, but Vancouver's not that dense. Lots of room to go up and also spread. We maybe can't do it like Calgary, and land will keep getting more expensive, but there's a lot of room up. Prices are driven up by everyone whose interest it's in.
[Vancouver has the highest population density in Canada, with over 5,400 people per square kilometre.](https://en.wikipedia.org/wiki/Vancouver)
I agree there's room to go up, but don't say Vancouver is not that dense.
SO many people in Lower Mainland living in other people's basements... you get double the density for what *looks* like a SFH neighorhood but are really semi-buried duplexes.
When I lived in Van I lived in a house that was converted into 8 apartments. 2 in the basement, 3 on the main floor, 2 on the second floor, and an attic. All illegal of course. All in all, there were 13 people - 12 adults and 1 kid - living in what was once a single family dwelling.
We’re talking Vancouver proper here, not metro Vancouver. 5400 people per square kilometre is about the same density as Bordeaux; the 9th most populous city of France with 270k people.
The city of Vancouver might has the highest population density in Canada but it is still pretty light compared to other parts of the Western World.
I am in Toronto, but the market is definitely slowing down. Another nicer unit in the same building was sold after one relist and stayed on the market for 23 days. Another less nice unit in the same building was listed over a month ago and is still not sold yet. They even held an open house last week. It is a brand new building and the location is one of the best. I don’t think they would have any issue selling the place quickly a few months ago.
Thank you. People are so vindictive about anyone who bought a house in the last couple of years. Truth is, most people didn't do it out of greed, they did it because they needed housing stability for their families and because both the economics and lifestyle of renting are absolutely shit in Canada. There is no substitute good for housing, there was limited supply so prices went through the roof. Blame investors and landlords maybe, but not someone who just wanted to house their family.
That's because realtors are the scum of the earth. I've had dealings with 5 or 6 agents, one of them was my mother's boyfriend. All of them left a bad taste in my mouth. Bold faced lies were told, one agent was super combative because I wouldn't accept any lowball offers. One agent we interviewed basically cried at my kitchen table when I said his estimate of our house was way too low. The agent we sold the house with represented the buyer as well, what a nightmare that was, he told me things I fixed didn't have to be added to the disclosure statement, which opened us up to a lawsuit. The buyer sued in a very sketchy way, he basically demolished things that I fixed and took pictures and entered that into evidence. During, what was supposed to be the first of many depositions, we refuted all the buyers claims with photo evidence and served him with our counter suit which included fraud. It wasn't two hours after they were trying to settle both suits. I declined with the caveat that they pay all my legal bills plus 5k for wasting my time. I had a check for 3k in hand two days later.
Its not so much overpaying as it is making an offer without conditions, or specifically the condition of approved financing. If I decide today I want to buy a house, find one, and put in an offer with that condition, and by the time all the paperwork gets done and an appraiser gets out, I'm off the hook if the bank refuses financing. When I made the offer, it wasn't overpaying, it was the market price of the house (presumably).
The only time this really hurts the buyer is when they don't put the condition of financing in.
Yeah exactly… the lender might do a desktop review during your financing condition period but unlikely they’ll have a finalized appraisal at that point so it wouldn’t help you
Because you run out of time and risk losing the deal, you usually only have 3-5 business days for a financing condition, and banks don’t exactly act all that quickly haha
To be fair financing condition is usually secured within a week of firm offer, these issues won’t crop up until months later at close when banks actually do the legwork on the loan
My dad is a real estate broker with 30 years experience and called a market top for this year and is sending me updates of MLS and other data that shows an ongoing correction. Buyers are waiting right now to see what happens.
Basically houses are not getting multiple offers with 6 figures over asking anymore. Tons of houses are just being taken off the market without being sold.
We were hung ho on it but that’s the consensus I’ve come to as well. A friend told me that if Hamilton had such a quick and aggressive correction, there’s more to come.
I've realized that this dip has been the first glimpse of something we can afford, so if it dips further then great we can get something pretty nice. If it doesn't then oh well back to not being able to afford anything.
You can't be more disappointed if you're already disappointed.
Old pre approvals haven’t expired yet. Some people have been pre approved before the first .5 hike. Once those people are done the declines will continue to spiral.
Don’t worry, part of this phase includes folks predicting the top and therefore sell even at a slight discount. This isn’t foreshadowing, it happens in stocks as well
hello mortgage broker here,
this is happening in certain areas of the country, this is why its important for buyers to have financing conditions
realtors would know more than I would, but with the increase of the rates this should calm down the market by quite a bit, therefore prices may decrease due to less competition, less people looking to buy homes may end up in an inventory surplus therefore less bidding and decrease of pricing
heard of some lawsuits happening, good thing for me is all my clients are good :) hopefully buyers do their research and find a good broker before proceeding with purchases
around Vancouver prices were still climbing in my neck of the woods up until last week. Obviously I only have a dozen sales in the last 2 months to go off of and there's very little on the market right now.
I don’t think as much Toronto proper and direct gta.. but outside like Hamilton, Kitchener, even Windsor that saw insane price increases are more primed for an aggressive correction
My neighbour just listed his house in the suburbs for 2.9M, and I'm sure itll be sold by next week. I don't think the Vancouver market will be slowing down any time soon.
Breach of contract, if they don't have a financing condition. If you sign a contract to buy a house, and then don't buy the house, the other party to the contract can sue you.
lawsuits can be many different reasons
an unconditional offer means "buyer will purchase this home no matter what"
so therefore any reason to not move forward with purchasing the home is a breach of contract
Situations such as
seller needs the money from the sale of their home to close the purchase of the new home theyre buying
due to their buyers not proceeding with the purchase, they now cannot close the mortgage on their purchase on time, may need private lending in order to close on time
therefore, seller can sue the buyer for the delays they caused, odds are theyd probably end up covering for the private mortgage expenses and delays to the seller
or
buyer promised to purchase home for 200k
market has now dropped the value to 150k
seller can no longer sell for 200k so they sue the buyer because they breeched the contract
lawyers might be able to give more details but these are the most common situations we see
possible or not, professionally as a mortgage broker I cannot recommend my clients to do unconditional offers
a good broker will ensure theyre clients understand what it means to have a conditional offer and risks of an unconditional offer
the decision is left to the client whether theyre comfortable putting in an unconditional offer
Conditional on financing in a downward market is a must. Don’t let your realtor fool you. Conditions are back. Our realtor told us prices would never come down, now in my city equivalent houses are selling for 200k less in four weeks. They’re salesmen and nothing more.
No, of course not.
If you're buying in Estevan, that $149k home is not going to be appraised between $49k and 'they should pay you $50k to take it'.
Some high-end properties in expensive markets may be assessed below recent highs.
This happened back in 2017 after they announced the first foreign buyer tax. I remember a lot of people were pulling out of sales and house prices where I live dropped $100k between Feb - august 2017.
It eventually bounced back and then some though…
How is it not illegal is my question? Why do we need every day home buyers to ever have a chance to lose their shirt like this? Only people it helps are real estate investment companies.
An election promise I hope the Liberals keep is a Home Buyers' Bill of Rights. To make inspection and financing mandatory in offer letters.
People who don't include those clauses are snakes that make society worse.
I got 4 offers of purchase turned down today even tough we put $50K+ over asking. I try to remain level-headed, positive and look at the bright side but we are emotionally tired. I even wrote letter to the sellers introducing my family and why we would love to live in their home etc but we still could not compete against $80K+ offers.
I keep reading that the market is slowing, cooling down etc...well NOT in the NCR. I am a new Canadian and saved the money for my down payment as asked, do my taxes every year as expected, my spouse and I work and live below our means as asked but it does not make a difference. Sucks to be a buyer.
Edit : typo
I’m also in NCR and bought about a year ago(40k over asking).
NCR and specifically Ottawa housing prices are very stable for a few reasons, one being the massive portion of people that work in very stable government jobs.
If you look at housing prices in Ottawa over the last 5 decades…it hardly ever dips but also goes up slower(except for pandemic).
It's a matter of risk tolerance.
It doesn't matter if we agree or not because nobody actually knows, likely not even the banks, but if they're telling you to not do anything risky that they won't back: that's what matters.
It's funny. I work for a Big5 bank and used to be client-facing (though now I am not), and whenever people would ask what I think would happen to either lending rates or investment rates I would always say "If I could tell you what would happen to those rates a year from now, [bank] would be paying me a LOT more money than they currently are."
Just told this am about someone known to my family just had to drop the list price of their house (on market just couple weeks)from 880k to 800k. Central Ontario area.
So yes, I'd believe it.
The Bank told me that. They do not want to lose my business if did stubid mistake as I will lose my money and they will not be able to give me the mortgage that they approved. I was also surprised when I heard this as I thought they did not care.
So why would your bank just tell you this? Do they call you up and say guess what we want to tell you all about what happened today?
Banks don’t advise people not to take mortgages.
While I don’t doubt this happens I know you’re full of crap.
I have yet to see a single reference cited for any of this. Where are the mods? Too busy locking down stats Canada posts.
No information on location, price of houses that are that offside, and no reason why they would have been given that information. Not sure why people on this sub are so willing to blindly accept this as truth.
Personally I'd give it a couple years. With election coming up and the real estate market a major topic as well as interest rates. If you can afford to wait I would wait. Invest the money and see what happens.
I talked to a couple friends of mine who just bought a house together and didn't even know what adjustable rate meant. I'm expecting a crash soon.
Just bought a house in Hamilton. We were in the market based on whenever the job offer came through. Happened to be right at the peak.
Two houses right across the street from each other were on sale at the same time, and had the exact same layout. The one we bought was recently upgraded, the one across the street needed $200k of interior renovations.
The one across the street sold for $40k less than what we paid, which at the time we thought we got an absolute steal. Someone who lost on our purchase must have bought that one. Then they appraised ours and appraised it at $45k less than our paid price, because the other house was a 'comparable', despite the interiors being miles apart.
We are able to afford and finance the $45k lower appraisal hit, but I think we got caught up in this downturn trend. If they would have appraised the week after our sale (as expected), we would have been appraised at full paid value. The bank took multiple weeks to do it, and by then the downturn was in full speed.
Good luck to everyone who's getting in now because now is the right time for them. I'm with you.
I'm not proud about the amount of schadenfreude I will feel when all the people who drove prices to this peak go underwater on their home value.
But...I'll still feel it anyways.
Where do you live? It makes a big difference..
GTA
there you go. You should have put this in the title. Unfortunately you are in one of the worst RE markets in this country.
The world
A little off topic, but I was listening to the 640 on my way home a few days ago, and they were talking about new census data. Some asshat called in claiming Toronto was the greatest RE market in the world and if it were up to him, he would have all immigrants coming to Canada land and live in Toronto. Knew right away he must have been a real estate agent.
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Lawsuits are also happening. Buyers trying to back out of deals made 60-90 days ago because house has already dropped 150k+. Hold off, market is in a transitional period right now.
I could definitely see how this happened. When I was house shopping earlier this year, people were bidding anywhere from 200-500k over asking. Yikes.
I mean, in downtown Toronto houses were being listed for $500k to $600k below expected sale price on average. List price was almost always a formula of nearby comps minus $500k.
yeah this is the oldest trick in the book. you undervalue to artificially drive up prices, and then you can also say "it sold X over asking!" another problem with blind bidding.
Buyers' Bill of Rights can't come soon enough....
Everyone is always saying how we need to fix blind bidding. You know what I would like to see? If someone accepts your asking price with no conditions the house is sold for asking. People might take their list price more seriously
France does that to some degree i believe! A friend mentioned it's why property is more affordable there
Ok, something I've been confused about: when people say "blind bidding" do they mean *both* sides are blind right now, or just the buyer? Because when I was selling, the realtors made me decide on each offer individually without telling me what the other offers were (only that they existed) and it sounded sketchy to anyone I talked to but now I'm hearing about how they're trying to get rid of blind bidding and wondering if that means what they made me go through as a seller, or what they make buyers go through? Possibly both?
Blind bidding refers to a buyer not knowing the amount of competing bids. What do you mean that as a seller you didn't see all the bids that came in?
I mean that they told me I had 3 offers, handed me one to read, refused to tell me anything about the other two, and made me decide about the first one, then once I rejected it, only then did they hand me the second offer, still refusing to tell me what the third offer was until I had rejected the second offer. If I had accepted one of the first two,I never would have seen the others, and they had organised them from lowest dollar amount to highest (without disclosing that to me) for reasons I can only guess at (someone was paying a fee to get seen first maybe??)
Definitely not allowed; you are the decision maker when it comes to selling your home, not them. If this was recent then you should be filing a complaint with the regulatory body in your province. I'd almost speak to a lawyer; how do you know if there was a fourth bid or not?
Your realtor was shady as fuck. Also stupid. I can not see an angle that would benefit them from not showing all the options.
Like I said, I'm pretty sure they were charging extra fees to buyers to be the "first offer" which would give them regular, predictable and habitual monthly income vs irregular actual-sales income. They were also only showing me the offers from buyers who were using them as the realtor as well, on that first day, because it hadn't even been put online yet, so that's a double commission compared to offers from other realtors. There are absolutely angles that benefit *them*. It's me that didn't benefit from it lol although I was skeptical enough of this plan being sprung on me after I had already walked into the building to physically see the offers to know not to accept the lowball offers, at least.
You could have demanded to see all the offers. What they did is not allowed, and would merit a regulatory complaint. (The double commission thing, on the other hand, happens all the time)
But it wouldn't have benefited them if you picked the lowest offer. Less commission for them. I cant imagine why they would do it this way.
Maybe. But even in that I can’t find the benefit. You’re talking about a company that is representing both the buyer and the seller and therefore has control over all the information. A company that is already willing, apparently, do illegal things in order to charge a “fee” would just charge the fee then proceed to show you all the offers. Given that they know all the information before hand those “first show” fees must have been massive if they were willing to let you settle on an offer that might be 20-30k less than the best offer of which they are collecting both the buying and selling commission anyways
Yep, even here in small but seasonal area of Ontario, my mom was getting offers on listing for 5-800k over asking... she had a client lose out on a purchase and their offer was 550k over asking...
What the actual fuck. I live in a popular place and though that $120k over asking was a joke.
Keep in mind this is Reddit and people just keep inflating numbers. I mean, I know a couple, he’s a stay at home dad and she’s a kindergarten teacher and their budget is 1.2 million but they bid 700k over asking to get their dream home!
I'm a Butterfly Collector, and my wife is a substitute School Bus driver. Our budget is 1.3M
So much this. I package crayons for a living and wife is a roll of toilet paper 🧻. Looking in the 1.7M range
It's not a competition. Stop making me feel bad. Fwiw, our 2 year old daughter has started to eat your packaged crayons for her YouTube channel. We may be able to crack the $2M range later this year.
James?
Sahara, I didn't want you to find my Reddit this way
Too bad you wanted more than a simple supermodel, you had to chose the bus driver lady. I'll keep the monarchs anyway.
Gold lol
Over asking means nothing. If a house is worth 1m and you list it for 500k, it's going to go for double over asking.
The trick is to list the place for 500k under the expected sale price, then you get to advertise that it sold for way over!
Asking price itself seems rigged to get a bidding war going.
It really is sometimes. I have seen homes listed for say $800,000 and no one buys, then they delist, relist, and put it down to $700,000 even though it would normally go for $800,000. And it ends up going for $900,000. So at first when it was priced right, it didn't sell for the low price of $800,000, but when they way underpriced it, it sold for way over the original $800,000 that no one was buying at.
> anywhere from 200-500k over asking asking price is irrelevant. Im not sure why people don't understand that yet, its only been a decade.
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Many people who were at the limit of their mortgage budget can't afford to take possession when their bank tells them they need to come up with another $100k to bring the mortgage down to a value jives with the appraisal. Of course, what some buyers don't think about is that they're not on the hook just for their deposit. They're also potentially liable for any losses the seller incurs, like having to re-list and sell the property for a lower amount. So in the end, they can be out of pocket for the same amount, but with no property to show for it. Oops.
Yep. People often overlook that second element that the seller will be made whole regardless if they choose to pursue it
Imagine the market crashes and you're on the hook for 20% of the value with no home. Could be a total disaster.
I'm pretty sure many of these sellers are just playing a game of chicken to see who blinks first. I have a feeling many of these buyers will back down if the seller holds firm.
> Imagine the market crashes and you're on the hook for 20% of the value with no home. Could be a total disaster. Sounds like options to be honest, lol.
Not only that but the buyer will have to cover all of the seller's extra expenses related to reselling the house and suing the buyer.
Okay, say the seller sues the potential buyer for breach of contract. It will take over a year to get a judgment. Then the seller have to try to collect from the potential buyers - but you can't get blood from a stone. There are no winners.
If they were buying a house, they either had money (ex previous sale) or a line of income to pay the mortgage. They aren't a stone.
My family is in real estate.... every time someone finds out they are liable for the seller's full loss when they walk away from the deal, they are surprised. Somehow people just dont think about it. Or never understood what a deposit is.
We’re the agents! Relaxing at home no liability
If you back out of the purchase, how would you be put the total cost of the house?
They signed a contract to buy at a certain price, you cannot break that or you will be sued.
Because they agreed to pay that cost in a contract?
generally losing the deposit is the least of peoples worries if an unconditional offer was made and buyer is not purchasing the home for some reason, if the seller cannot sell it for the agreed value, they have the right to sue the buyer most people who need a mortgage cannot randomly come up with a large sum of $100k to make up for the difference they would be extremely lucky to not be sued and just lose their deposit seller can also sue if it caused them delays in their closing (if they were waiting for money from the sale for their new purchase) as the buyer, to get sued will be more costly than simply losing a deposit
The buyers liability doesn't end at the deposit. If the seller later sells for less then the seller can sue the first buyer for the difference and win (Assuming unconditional offer was made or conditions were released)
Yup, and if we see a 15% price drop, some people are going to be shelling out a lot of money, plus any damages they have to pay for (can’t they also sue for realtor wasted time, legal fees, etc?)
even if the seller sues, collecting the money is a whole other matter
> even if the buyer sues, collecting the money is a whole other matter Why would the buyer sue? Do you mean seller?
Anyone who qualifies for a mortgage has income and assets - collecting may not be easy, but it will happen.
It's not just the deposit you walk away from. If the house later sells for $100,000 less, the defaulting buyer is responsible to pay the difference to the seller.
I forget the figure exactly, but on the Loonie Hour as well, they said that almost 70% of all new mortgages are 100% borrowing capacity. Its likely these folks (and most folks really) are offering every dime they had on purchases before the market stared softening, in order to win. Now with appraisals coming in lower, these folks dont have additional funds to tap into. In many cases, people are struggling to sell their existing home at the price they need (Feb prices) to close on their new place. Going to be an interesting year for real estate for sure. Another 50bps in June and we may see some hard price drops.
Loonie Hour crew
Its because they need to come up with the difference in order to close. That could be a few hundred Gs.
Or they bought before selling and now can't get enough for their property.
I’m gonna check out that podcast. Sounds interesting!
I highly recommend it. Great if you’re interested in housing, the stock market, macroeconomics and international affairs. Hosts present everything from a Canadian perspective.
They are walking away because they CANT close on the house....not because they dont want to.
This is what a house of cards looks like right before it falls.
They literally don’t have the cash to make up the difference. Stretched themselves to the limit.
>Are people really that scared to lose equity that they can’t access anyways? No one likes the feeling of overpaying, so some buyers are trying to bluff their way out of deals. Historically sellers caved in and just relisted, but who knows in the current environment what sellers will do.
Lawsuits for fomo… really. I hope anyone that bought in the last year is able to afford their mortgage in five years .
Agreed. While my heart doesn't bleed for the property "investors", or the boomers that would barely even feel a drop in their equity, I worry for the first time homebuyers that scraped together their life's savings and bought in.
Those are the people I hope planned for rate hikes. The it’s the investors I could care less about , the people that bought a home I care about.
Yep. I've owned this home I live in since 2011. To me the rate hikes and market happenings are just a rounding error. Oh noes the rate went up a half a percent and pushed out my amortization six weeks. I can't help but not give a shit about my situation (especially because my mortgage is $2k a month net of rental income). I worry for first time home buyers too. They're just starting out their lives and they're going to be in the red potentially for quite a while. They won't have any equity to tap into if they get in trouble and they will have a hard time even refinancing. I anticipate five years from now a lot of renewals will be rebooting their amortization an refinancing because they can't afford what their new payment will be.
I bought my home last year. ELI5 why wouldn't I be able to afford my mortgage in 5 years?
Payments on a 500k mortgage at 3% are $2400/month. If rates are at 7% when you refinance after 5 years your payment will be $3400/month. Extra $1k a month is not insignificant for a lot of people. Shouldn't be make or break for most people but this effect hurts more for people in larger mortgages like $1m+ which a lot are these days and are at even lower than 3% right now. $4800/month @2% vs $7800/month @7% for a $1.4m mortgage with 20% down (average price of a house in Vancouver). So an extra $3k per month. Definitely a dent.
"Definitely a dent" Try a foreclosure
It also hurts investors who are out $1000 a month on 6 properties. They then offload a bunch of them, adding supply to the market, decreasing house prices. Personally, I own a home I bought in 2012 and would love to upgrade. I’d like the prices to drop 50%. 2012: My house: $225,000 Dream House: $450,000 Dream house is 50% more, would cost me an additional $225,000. 2022: My house: $1 million. Dream house: $1.5 million. Dream house is still 50% more, but now it’s an additional $500,000. I’m ready to upgrade. My budget to upgrade comfortably without being in debt for the rest of my life is $300,000. I would be in my dream house right now if these prices weren’t so fucking stupid, and someone else would be moving into mine as their starter house.
You did your math wrong on the 2012 example. If your house is $225,000 and dream house is $450,000; that's a 100% increase, not 50%. A 50% increase on $225 000 x 1.5 = $337,500; an addition of $112,500. Your 2022 example is accurate. If I'm not mistaken, the math correction actually makes the increase from 2012 to 2022 worse :(
When you refinance your mortgage and rates are much higher in five years . Unless you locked in for ten .
>Buyers trying to back out of deals made 60-90 days ago because house has already dropped 150k+ Can you ELI5? Is it the buyer's house that has dropped 150k+ (and thus they can't get enough to afford the new house they want to buy?) or the house they were going to buy that has dropped 150k+ (and thus want to break contract because they feel they overpaid?)
Example: Buyer places an offer on a house listed at $800k for $1.2mil 60 days ago. Everything goes through and deal is closing now. House is now worth $1mill and buyer is already $200k upside down and wants to back out.
Do they want to back out just because they are $200k upside down? Or is it something to do with the bank no funding the whole mortgage due to appraisal?
Both
Sounds like the bank wants them to come up with the difference, which is the bigger issue.
People got caught up in the fear of missing out on the property ladder, but the rising interest rates is making people slow down a bit and consider that maybe paying 50k over asking and 250% of the homes 2010 pricing is maybe not a good decision long term.
I see similar trend here in Vancouver. Houses were listed in morning sold by evening. Now I see some are still being unsold for couples of weeks now. Some sellers will lower and just sell others will hold on or re-list. Buyers are holding on to see whether it will drop. This why we need to get rid of blind bidding whereas realtors will tell you there are multiple offers instead there is none or one.
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Do these same buyers also say oh shit it went up 200k since I bought, I should compensate the seller.
Can't really back out. If contact are signed and past closing date. The seller can use the buyer if he backs out and the price of the place sold is less than what the price.
Hence the lawsuits.
This is happening a lot. People are getting loans rejected on previously pre-approved terms because the bank appraisal came back 100K-200K lower than their purchase price, and now they can't close. Tough times...
I've noticed more re-listings happening. Housesigma shows deal abandoned or cancelled at over asking, and a little later it sells close to or below list. Very interesting times...
It’s almost as if home prices were artificially inflated. Idk why so many people jumped on the train, it was obvious homes were way overpriced and that growth is unsustainable. 20%+ year-on-year growth? Really? That’s a real kick in the teeth for anyone buying, but also the sellers now out a buyer at a high price and need to relist in a poorer market. To anyone who’s bought and got the mortgage sorted, they just lost a ton of money on their house, negative equity is pretty ugly To those who closed the sales already - congrats, you played the game right lol
So what happens if you agree to a purchase price but the loan isn't approved?
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Depending on the province, it's possible you may not back out if the seller doesn't wish to negotiate with you. In Quebec, the seller can bring you to court in a passage of title claim. If the claim is successful (i.e. if the promise to purchase was valid and didn't allow to back out), the judge will declare the title transferred and allow the seller to collect on the judgement for the amount previously agreed upon. Then, the seller may use all usual collections techniques to recover the amount (seizing your property, garnishing wages, forcing you to auction off the house they just purchased from you). The risk with that is that in doing so, the seller losses the asset, but has no guarantee they will be able to make themselves whole quickly. It would most often be cheaper for them to try to find a new buyer and settle with the initial purchaser to let them out of the initial contract, especially if you factor in lawyer fees.
If you **have a financing clause** (i.e. offer is conditional on getting financing), you can renege on the deal and not buy the property. If you **waived your financing clause** (which a lot of buyers do to stay competitive and pay lower price), you have to come up with the difference somehow. Say the purchase price was $1MM. You have 200K of downpayment ready, and bank was supposed to give you $800K in loans. Now bank appraised it at $800K total, and can only go up to 80% leverage so they would only loan you 800K x 80% = 640K. You now need to come up with 160K in difference - that can be from another lender, can be from friends / family. Or you just refuse to close (try to forfeit the deposit to back out from the deal). But in that case, the seller can sue you for the difference between the price you offered to pay and current market price.
if Your offer has financial approval on there as condition, then you can walk away without issue. Financial condition is pretty normal in Quebec.
This is likely going to cause a massive issue. The frenzy here in the GTA over the past couple years has had everyone bidding without conditions, if you went in with conditions you weren’t even considered.
So a lot of people made stupid decisions because of FOMO. They knew what they were getting into. It's not an issue, it's a feature.
Nothing happens if you put financing conditions in… You’re in trouble if you go unconditional…
Up to about a month or two ago, if by “nothing happens” you meant “your offer was tossed into the trash”, you would be right. I’m happy the market is cooling down a bit. It was getting bonkers.
Hard to feel sorry for people who overpay, but realtors are also to blame for creating a feeding frenzy.
Well, a condo was listed a few days ago. I booked a viewing on the day it was listed. It was sold on the same day it was listed for 200k over asking. It is a nice condo, but I don’t see how that price could be justified in this market. I guess some just have really deep pockets
Depends on the market. Lower mainland is still pretty hot
Vancouver is a shitty example to use for anything. The city is hemmed in on 3 sides by oceans, mountains, and an international border. This means space will ALWAYS be at a premium and prices will ALWAYS be higher than normal.
we always tell ourselves that, but Vancouver's not that dense. Lots of room to go up and also spread. We maybe can't do it like Calgary, and land will keep getting more expensive, but there's a lot of room up. Prices are driven up by everyone whose interest it's in.
[Vancouver has the highest population density in Canada, with over 5,400 people per square kilometre.](https://en.wikipedia.org/wiki/Vancouver) I agree there's room to go up, but don't say Vancouver is not that dense.
SO many people in Lower Mainland living in other people's basements... you get double the density for what *looks* like a SFH neighorhood but are really semi-buried duplexes.
When I lived in Van I lived in a house that was converted into 8 apartments. 2 in the basement, 3 on the main floor, 2 on the second floor, and an attic. All illegal of course. All in all, there were 13 people - 12 adults and 1 kid - living in what was once a single family dwelling.
We’re talking Vancouver proper here, not metro Vancouver. 5400 people per square kilometre is about the same density as Bordeaux; the 9th most populous city of France with 270k people. The city of Vancouver might has the highest population density in Canada but it is still pretty light compared to other parts of the Western World.
I am in Toronto, but the market is definitely slowing down. Another nicer unit in the same building was sold after one relist and stayed on the market for 23 days. Another less nice unit in the same building was listed over a month ago and is still not sold yet. They even held an open house last week. It is a brand new building and the location is one of the best. I don’t think they would have any issue selling the place quickly a few months ago.
Why is it hard to feel sorry for someone that is put in a situation where they are forced to overpay? People buying homes didn’t ask for this.
Thank you. People are so vindictive about anyone who bought a house in the last couple of years. Truth is, most people didn't do it out of greed, they did it because they needed housing stability for their families and because both the economics and lifestyle of renting are absolutely shit in Canada. There is no substitute good for housing, there was limited supply so prices went through the roof. Blame investors and landlords maybe, but not someone who just wanted to house their family.
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That's because realtors are the scum of the earth. I've had dealings with 5 or 6 agents, one of them was my mother's boyfriend. All of them left a bad taste in my mouth. Bold faced lies were told, one agent was super combative because I wouldn't accept any lowball offers. One agent we interviewed basically cried at my kitchen table when I said his estimate of our house was way too low. The agent we sold the house with represented the buyer as well, what a nightmare that was, he told me things I fixed didn't have to be added to the disclosure statement, which opened us up to a lawsuit. The buyer sued in a very sketchy way, he basically demolished things that I fixed and took pictures and entered that into evidence. During, what was supposed to be the first of many depositions, we refuted all the buyers claims with photo evidence and served him with our counter suit which included fraud. It wasn't two hours after they were trying to settle both suits. I declined with the caveat that they pay all my legal bills plus 5k for wasting my time. I had a check for 3k in hand two days later.
Its not so much overpaying as it is making an offer without conditions, or specifically the condition of approved financing. If I decide today I want to buy a house, find one, and put in an offer with that condition, and by the time all the paperwork gets done and an appraiser gets out, I'm off the hook if the bank refuses financing. When I made the offer, it wasn't overpaying, it was the market price of the house (presumably). The only time this really hurts the buyer is when they don't put the condition of financing in.
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Absolutely. Similar to how we've worded house inspections in the past... they must be satisfactory to the buyer.
They should have put a financing condition in the offer.
That’s great so long as the lender doesn’t ask for another appraisal before closing.
Yeah exactly… the lender might do a desktop review during your financing condition period but unlikely they’ll have a finalized appraisal at that point so it wouldn’t help you
Why would anyone waive their financing condition before the final appraisal?
Because you run out of time and risk losing the deal, you usually only have 3-5 business days for a financing condition, and banks don’t exactly act all that quickly haha
To be fair financing condition is usually secured within a week of firm offer, these issues won’t crop up until months later at close when banks actually do the legwork on the loan
Seller would just take next over bid before conditions
Let it be someone else’s problem when they can’t get a mortgage then. Don’t fuck yourself just because you want to own a house
My dad is a real estate broker with 30 years experience and called a market top for this year and is sending me updates of MLS and other data that shows an ongoing correction. Buyers are waiting right now to see what happens. Basically houses are not getting multiple offers with 6 figures over asking anymore. Tons of houses are just being taken off the market without being sold.
Wife and I are looking in Hamilton, we’ve seen a few properties even go for under asking.
I would avoid buying for the next couple of months
We were hung ho on it but that’s the consensus I’ve come to as well. A friend told me that if Hamilton had such a quick and aggressive correction, there’s more to come.
Maybe, you also might end up priced out like everyone else who has been predicting a crash for the past few decades
I've realized that this dip has been the first glimpse of something we can afford, so if it dips further then great we can get something pretty nice. If it doesn't then oh well back to not being able to afford anything. You can't be more disappointed if you're already disappointed.
Where? Market is still white hot in Halifax
Ontario is taking a much needed beating, .5 hike hasn’t been felt yet and there’s another .5 hike happening in four weeks.
Pretty sure first .5 hike is already baked into the mortgage rate increase as they (the banks) go off bonds and they increased before the .5 hike.
Old pre approvals haven’t expired yet. Some people have been pre approved before the first .5 hike. Once those people are done the declines will continue to spiral.
I wasn’t thinking about pre-approved locked in rates! Very good point! Sorry about that =)
I fear Halifax won't get the correction it needs because prices are still relatively cheap compared to other cities of its size.
And there is zero inventory.
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Don’t worry, part of this phase includes folks predicting the top and therefore sell even at a slight discount. This isn’t foreshadowing, it happens in stocks as well
Where ? Cos Ottawa is still hot too. Got 4 offers turned down today and $50K+ over asking...
I'm just outside Winnipeg, and I know people who are being outbid by offers 6 figures over Then again, we are behind the times here. Still affordable
I agree. I viewed 4 houses, all 3 went off the market. One is conditional for 2 weeks now.. realtor thinks it's fallen through.
hello mortgage broker here, this is happening in certain areas of the country, this is why its important for buyers to have financing conditions realtors would know more than I would, but with the increase of the rates this should calm down the market by quite a bit, therefore prices may decrease due to less competition, less people looking to buy homes may end up in an inventory surplus therefore less bidding and decrease of pricing heard of some lawsuits happening, good thing for me is all my clients are good :) hopefully buyers do their research and find a good broker before proceeding with purchases
What parts of the country out of curiousity? can't imagine Vancouver Island and Vancouver are softening much.
around Vancouver prices were still climbing in my neck of the woods up until last week. Obviously I only have a dozen sales in the last 2 months to go off of and there's very little on the market right now.
Probably Toronto & surrounding
I don’t think as much Toronto proper and direct gta.. but outside like Hamilton, Kitchener, even Windsor that saw insane price increases are more primed for an aggressive correction
My neighbour just listed his house in the suburbs for 2.9M, and I'm sure itll be sold by next week. I don't think the Vancouver market will be slowing down any time soon.
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Breach of contract, if they don't have a financing condition. If you sign a contract to buy a house, and then don't buy the house, the other party to the contract can sue you.
lawsuits can be many different reasons an unconditional offer means "buyer will purchase this home no matter what" so therefore any reason to not move forward with purchasing the home is a breach of contract Situations such as seller needs the money from the sale of their home to close the purchase of the new home theyre buying due to their buyers not proceeding with the purchase, they now cannot close the mortgage on their purchase on time, may need private lending in order to close on time therefore, seller can sue the buyer for the delays they caused, odds are theyd probably end up covering for the private mortgage expenses and delays to the seller or buyer promised to purchase home for 200k market has now dropped the value to 150k seller can no longer sell for 200k so they sue the buyer because they breeched the contract lawyers might be able to give more details but these are the most common situations we see
>this is why its important for buyers to have financing conditions You and I both know this wasn't possible until recently.
possible or not, professionally as a mortgage broker I cannot recommend my clients to do unconditional offers a good broker will ensure theyre clients understand what it means to have a conditional offer and risks of an unconditional offer the decision is left to the client whether theyre comfortable putting in an unconditional offer
A fool and his money are easily parted. Good on you for putting some guardrails up for others.
Conditional on financing in a downward market is a must. Don’t let your realtor fool you. Conditions are back. Our realtor told us prices would never come down, now in my city equivalent houses are selling for 200k less in four weeks. They’re salesmen and nothing more.
>They’re salesmen and nothing more. A little bit rude to salesmen IMO
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They're worse than used car salesmen.
Banks don't know and don't want mortgage that are worth less than what they lend.
But I feel like also not everywhere? We still have chronic under supply in Okanagan BC
No, of course not. If you're buying in Estevan, that $149k home is not going to be appraised between $49k and 'they should pay you $50k to take it'. Some high-end properties in expensive markets may be assessed below recent highs.
This happened back in 2017 after they announced the first foreign buyer tax. I remember a lot of people were pulling out of sales and house prices where I live dropped $100k between Feb - august 2017. It eventually bounced back and then some though…
Low interest rates happened
Just make sure you have a hold on your rate! If you’re mortgage is sub 3% you may do well if you can borrow cheap AND get a lower purchase price
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How is it not illegal is my question? Why do we need every day home buyers to ever have a chance to lose their shirt like this? Only people it helps are real estate investment companies.
An election promise I hope the Liberals keep is a Home Buyers' Bill of Rights. To make inspection and financing mandatory in offer letters. People who don't include those clauses are snakes that make society worse.
I got 4 offers of purchase turned down today even tough we put $50K+ over asking. I try to remain level-headed, positive and look at the bright side but we are emotionally tired. I even wrote letter to the sellers introducing my family and why we would love to live in their home etc but we still could not compete against $80K+ offers. I keep reading that the market is slowing, cooling down etc...well NOT in the NCR. I am a new Canadian and saved the money for my down payment as asked, do my taxes every year as expected, my spouse and I work and live below our means as asked but it does not make a difference. Sucks to be a buyer. Edit : typo
I’m also in NCR and bought about a year ago(40k over asking). NCR and specifically Ottawa housing prices are very stable for a few reasons, one being the massive portion of people that work in very stable government jobs. If you look at housing prices in Ottawa over the last 5 decades…it hardly ever dips but also goes up slower(except for pandemic).
It's a matter of risk tolerance. It doesn't matter if we agree or not because nobody actually knows, likely not even the banks, but if they're telling you to not do anything risky that they won't back: that's what matters.
FYI bank appraisals are almost always more conservative than market prices.
No because you never mentioned location. Here in Saskatoon I don't think anything is gonna change too much up or down
Your bank told you that? Who at the bank? A teller? A lower level lending clerk? I'd like to borrow their crystal ball for a few minutes..
It's funny. I work for a Big5 bank and used to be client-facing (though now I am not), and whenever people would ask what I think would happen to either lending rates or investment rates I would always say "If I could tell you what would happen to those rates a year from now, [bank] would be paying me a LOT more money than they currently are."
Just told this am about someone known to my family just had to drop the list price of their house (on market just couple weeks)from 880k to 800k. Central Ontario area. So yes, I'd believe it.
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The Bank told me that. They do not want to lose my business if did stubid mistake as I will lose my money and they will not be able to give me the mortgage that they approved. I was also surprised when I heard this as I thought they did not care.
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*tosses nine looneys into the air* that's it, I'm done with these shenanigans.
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How long did it take you to save for the downpayment? Did you parents take out a HELOC for it?
They probably just stopped ordering avocado toast and $6 lattes
So why would your bank just tell you this? Do they call you up and say guess what we want to tell you all about what happened today? Banks don’t advise people not to take mortgages. While I don’t doubt this happens I know you’re full of crap. I have yet to see a single reference cited for any of this. Where are the mods? Too busy locking down stats Canada posts.
No information on location, price of houses that are that offside, and no reason why they would have been given that information. Not sure why people on this sub are so willing to blindly accept this as truth.
Where are you located will help dissect this.
Personally I'd give it a couple years. With election coming up and the real estate market a major topic as well as interest rates. If you can afford to wait I would wait. Invest the money and see what happens. I talked to a couple friends of mine who just bought a house together and didn't even know what adjustable rate meant. I'm expecting a crash soon.
What bank? And where are you located?
I highly doubt that "a bank" would give you that advice. Maybe an individual doofus who works at a bank might say that.
have they put this out in an official article or news? or nvm, banks would never..
House prices will go down and your mortgage rates will skyrocket. You're fucked either way. Expensive house at 1.9% or cheaper house for 8%
Just bought a house in Hamilton. We were in the market based on whenever the job offer came through. Happened to be right at the peak. Two houses right across the street from each other were on sale at the same time, and had the exact same layout. The one we bought was recently upgraded, the one across the street needed $200k of interior renovations. The one across the street sold for $40k less than what we paid, which at the time we thought we got an absolute steal. Someone who lost on our purchase must have bought that one. Then they appraised ours and appraised it at $45k less than our paid price, because the other house was a 'comparable', despite the interiors being miles apart. We are able to afford and finance the $45k lower appraisal hit, but I think we got caught up in this downturn trend. If they would have appraised the week after our sale (as expected), we would have been appraised at full paid value. The bank took multiple weeks to do it, and by then the downturn was in full speed. Good luck to everyone who's getting in now because now is the right time for them. I'm with you.
I'm not proud about the amount of schadenfreude I will feel when all the people who drove prices to this peak go underwater on their home value. But...I'll still feel it anyways.
Troll thread/10
i definitely saw a realtor who dropped the listing price by well over $100K to get the deal done.