Cass poses a question in another post regarding the hot Saskatoon real estate market. By the time I finished my response I realized that I had written a whole new post so I brought it upfront for the rest of you.

If any of my real estate friends have something to add I would really appreciate your input and I’m sure Cass would as well.

Cass said:

My husband and I have put offers on 3 different houses and 2 were in bidding wars.  The last house we offered $7,000 over asking price and the house went for $26,000 over asking.  This house had a basement suite and the buyer came in and paid cash and is most likely using it as a full revenue property.  This is the 2nd house we lost due to another buyer using it as a revenue property.  Can you please give us some advice on how a young married couple with a baby on the way is supposed to compete in a market like this?  It tends to be very frustrating and discouraging when the houses in our price range are being scooped up by investors, as there aren't too many decent houses on the east side for around the $200,000 mark.  We are fully aware and prepared to place an offer over asking, but how can you compete with someone paying cash?

Norm said:

Cass, thanks for stopping. Cash sounds pretty impressive but when I'm reviewing offers it only goes so far with me. The seller is not normally very concerned with how the home is being financed.  However, cash offers do often come forward without any conditions attached and the thought of having a good offer completed right now is very attractive to most sellers. One of our sellers just accepted an unconditional offer which was $4,000 lower than the second-best. They see some value in knowing that the sold sign goes up right now and that there aren't going to be issues that have to be sorted out.

Perhaps you could see your mortgage person and tell them that you want to write your next offer without a finance condition. If that person can assure you that you're good for $225,000, for instance, there is probably little risk in eliminating that condition.

Request and review the Property Condition Disclosure upfront. It's always a good idea to ask your agent to "incorporate" the disclosure but if you view the statement prior to writing, you don't need to include it as a condition.

The biggest gamble is the home inspection. Do you have the guts to write an offer that is not subject to an inspection?  It's a tough call but the truth is that it's rare that significant problems are found. Most commonly we see busted furnaces, grade issues, and other items which are relatively easy fixes. I don't ever feel good about suggesting a buyer not have a property inspected, but the fact is this one is always a big concern for sellers, even those who are confident in their property. Do you have someone who could help you do a cursory inspection of a property prior to writing an offer? If you can't get around this gamble, you might consider writing the home inspection condition in a different way which would allow you to back out if major problems are discovered but also provides the seller with an assurance that you aren't going to nickel and dime. "This offer is subject to a professional inspection of the property to determine the structural integrity of the improvements. The buyer agrees that they shall have no right to rescind this offer for the discovery of defects which do not exceed (insert amount here) in repair costs."

Conditions like "satisfactory gas line inspection" or "review of local bylaws," etc are bound to doom your offer. Do your homework in advance.

Scrape together as much money as you can for a deposit and show the seller your good faith. A $10,000 is a strong sign and it's totally appropriate in this market.

Try writing the seller a personal note to include with your offer. Let them know who you are and how much you love their home. Tell them that you are very confident in the house (if you are) and how much you look forward to raising your family there. Ask them, "Is there anything else which we can do to have you favour our offer? We are open to discussing ways in which we can come to an agreement. We really want to make your house our family's home. We are available at a moment's notice to address any concerns which you may have."  Place the note in an envelope with the seller's name on it and enclose it with the offer in another envelope.  Have your agent deliver it to the house when offers are presented. Go with him. Wait outside in the car. Be sure that the seller's agent knows you are there; ready to deal with issues that concern the seller.

All other things being equal, most sellers would prefer to see their home go to a family instead of an investor. Try to use that to your advantage by giving the seller a little insight into who you are. Good luck.  I really hope you get the next one.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

The Calvert government announced another election year carrot yesterday unveiling its plan to create the “largest free wireless Internet network in Canada.”The province will invest approximately $1.3 million dollars to install wireless transmitters in various “hot spots” through Saskatoon, Regina, Moose Jaw and Prince Albert. They’ll also foot the bill for the service costs which are estimated to be around $340,000 a year. The “Saskatchewan Connected” initiative should be up and running by May of this year.

Saskatoon residents can expect free wireless service in a number of locations including the downtown Saskatoon area, the University of Saskatchewan, SIAST and the Broadway business district. There is some possibility that wireless zones may be expanded in the future.

At the announcement, Premier Calvert said, “We need to keep Saskatchewan at the forefront…of information technology” and added that the initiative will “contribute significantly to the progressive image of our communities.”

Andrew Thomson, the minister responsible for information technology suggested that you may not want to move too quickly in dumping your current Internet service provider. He promised that the service would be superior to dial-up, but it won’t meet high-speed specifications. Secure transactions are not recommended. Porn and gambling sites will not be accessible.

Personally, I think it’s long overdue and a pretty cool move but I expect that the Calvert government’s hope that it will “attract and retain” young people in the province is a bit of a stretch.

Norm Fisher

Royal LePage Vidorra

What is up with the Saskatoon condo market? One and two-bedroom apartment-style condos have been flying off of the market at an unbelievable rate. The price change is almost mind-boggling for a market that has become accustomed to annual price increases limited to the 4%-7% range.

I met with a young guy on January 9. He’s finishing his final year at the University of Saskatchewan and will soon be ready to sell his condo which is located on the east-side. It’s a 2 bedroom unit of approximately 700 square feet. Back in January, we were discussing a list price of around $85,900 but at the time he was at least two months away from listing the home. He emailed me yesterday wondering what has been happening in the condo market and he asked if there has been any change in the value of his home. I responded by telling him I felt pretty confident that we could market it at $110,000 today. He promptly emailed me back for a head check.“Let’s make sure we’re on the same page here Norm. I’m the guy…$85,900.”

Well, here’s a little recent history of what’s been happening in the condo market.

On January 9, I helped a young woman purchase a two-bedroom condo at Shorebird Watch for $91,500.The following day, the price on those units went up to $96,500.A number of price increases were implemented over the next few weeks. By February 6 the price for these homes had reached $107,900.The last of those condos have been sold. On the morning of February 4, I listed a small condo on Kingsmere Boulevard for $102,900, which at the time was competitive with the Shorebird Watch prices. After doing a little pre-promotion we went to the market on the morning of the 6^th, showed the unit 23 times (that day) and by the end of a long day, my seller and I were reviewing a stack of offers. The winning bid was $113,000. Last week, my good friend Sean Wilson (as good a friend as one can be given the fact that we’ve never actually met in person) from Remax listed a 755 square foot condo on Wollaston Crescent for $114,900 and while there are still some conditions on the agreement which prevent the price from being published, I’m confident that it likely sold for the asking price, if not above. Wow!

Take a look at the Pine Creek townhomes (no longer available). At the beginning of the year, you could purchase one of the base entry-level units for $144,400.Those same homes are selling today at $199,400, a thirty-eight percent increase in just two months' time.

These particular homes all provide a pretty good overview of what’s going on in the Saskatoon real estate market. When you have what are essentially the same units selling repeatedly at progressively higher prices you can’t help but feel like you’re in Calgary or Edmonton.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

If you’ve visited my blog before, chances are you’ve caught on to the fact that I’m very concerned about a practice that is occurring regularly which I believe is deceptive and hurtful to both buyers and sellers. It goes like this; the agent lists the seller’s property and promises to give the home full exposure to the market including all kinds of advertising and more importantly, MLS® service. He then does whatever he can to hide the listing from the market while he makes his best effort to sell the property himself, hoping to pocket the entire commission. Perhaps he lets a few of his best buds from the office in on the game, but for the most part, he tries not to let anyone know it’s for sale unless he or someone else from his office has the chance to show it to the buyer.

Why should you care? Well, if you’re a home buyer it robs you of the opportunity to see and consider homes that were supposed to be listed MLS®. It limits your options. If you’re a seller, you should care because these practices are almost certainly going to cost you money; lots of money. Every agent knows that there is a pretty direct relationship between the number of prospective buyers for your home and the price at which your home will sell. If an agent pulls this trick on you, he has no shame. He is a deceptive, selfish person who thinks nothing of stealing from you. He certainly has no regard for the fiduciary duty which he owes to you as your agent.

At first, I was reluctant to bring it up. Now, I’m like a raving lunatic who can’t be stopped until this evil practice is dead. Please forgive my rambling but I do take this business very seriously.

I did a little research today on Saskatoon and area real estate sales dating back to February 15.

Here’s what I found.

• A seller is more than twice as likely to receive an offer which is above the list price if the buyer is represented by another real estate company (or brand). Last week the average overbid exceeded $6,000 and we’ve seen offers as high as 15% over list price in the past few weeks. As a home seller, you probably want to maximize the chances that it will happen for you.

• Where a listing sold for less than the asking price, the average discount was just .4% if the buyer was represented by a different real estate company (or brand). The discount jumped to 2.4% when the same company (or brand) represented both the buyer and the seller. On a $250,000 home, the difference amounts to an additional $5,000.

I believe that this massive disparity is the result of agents who engage in the practice I’ve described. I can’t think of another reasonable explanation and I’m seeing it happen every day.

There is nothing wrong with entertaining offers from a buyer who is working with your agent, or your agent’s company. However, if there aren’t any agents from other companies inquiring about your home, you may want to find out if your agent is playing “hide the listing.”We are currently experiencing the hottest real estate market I’ve ever seen. Make sure your agent is helping you take advantage of it, and not robbing you blind.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

Here’s a brief statistical overview of residential sales as reported to the Saskatoon Real Estate Board MLS® system for the past week.

Notable changes over the previous week:

The percentage of listings sold at the list price or above the list price increased from 48% to 56%.

The average selling price of a home exceeded the average listing price in four of five areas*.

The average overbid where listings sold over their list price increased 27% from $4,735 to $6,037.

Largest overbids

• 864 square foot Lakeview condo sells 10% over list price at $113,000.
• 1,000 square foot Dundonald house sells 10% over list price at $198,000.
• 975 square foot City Park house sells 10% over list price at $170,000.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

I’ve said it before and I’ll say it again. Anyone can sell a house. Anyone! If securing a private sale on your home is the only goal you’re likely to find it a snap in this hot Saskatoon real estate market.

Take this lovely little Fairhaven, Saskatoon home for example. It was offered to the private market about one week ago for $145,000. Rumour has it that it sold to the first warm body that walked through the front door. Check today’s classified section of the Saskatoon Star Phoenix if you’d like to have an opportunity to buy it from the first buyer for only $165,000.Act quickly. It looks like a reasonably good buy to me.

There’s another story floating around the Saskatoon real estate community. I have no idea if it’s true or not. These stories are often jazzed up a bit for dramatic effect but this is what they’re saying. A private seller negotiated a deal on his home for approximately $190,000.The offer was subject to a satisfactory appraisal of the home. The appraiser visits the home and after he conducts his inspection of the property the seller asks him, “What’s it worth?”The appraiser tells him it’s worth between $220,000 and $230,000.He’s no longer interested in selling to this particular buyer. We can only wonder if his lawyer will find a way to get him out of the deal but you can bet it won’t happen without a fight.

Selling a home in this real estate market without an experienced, competent and trustworthy agent could be compared to learning to drive at the Indianapolis 500. You’re likely to learn some lessons but those lessons will come at a price.

Ask me what your home is worth today. I’ll most likely tell you that I can’t be sure. I can tell you that I’ll make darned sure it’s properly introduced to a huge number of prospective buyers and that you’ll likely have several offers to choose from. My last listing brought 38 showings and 16 offers. The one before that had 23 showings and 10 offers. Both homes sold at a premium price. Neither of these happy sellers had any doubts about the true market value of their home when the dust settled and they were both pretty darned happy to pay me for the effort. I believe you’d feel pretty good about it too. Give me a week. If I can’t deliver an offer that truly excites you, I’ll give you back the listing and be on my way.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

If you’ve been shopping in the Saskatoon real estate market for longer than a couple of months I don’t have to tell you that the rules have changed this year, and they’ve changed dramatically.

At the close of 2006, resale inventory had dropped to an all-time low of around 250 active listings and while we’ve started to see more homes being listed for sale they are getting snapped at a pace which hasn’t allowed inventory levels to rebound at all. Today, the Saskatoon MLS® system shows 244 active house and condo listings across all price ranges and in all Saskatoon neighbourhoods.60-70% of those properties probably have offers pending and the majority of what remains are the laggards which most prospective buyers have passed on for one reason or another.

New MLS® listings are attracting attention and viewings quite quickly and in many cases, they’re generating multiple offers resulting in a bidding war. Last week, almost 25% of the homes which were reported sold on the Saskatoon MLS® showed sale prices which were above the asking price. The number of overbids ranged from a low of $10 over the list to a high of close to $30,000 above list price. The average overbid in most areas was less than $5,000.

Nobody wants to pay too much for a home. One might look to the aforementioned sale which went close to $30,000 above the list price and ask, “Are those buyers’ nuts?” I’m going to suggest that they just might be a little sharper than you think. See, these folks now own an interest in some Saskatoon real estate. While the other 37 buyers who viewed this home continue to struggle to find a place in the market, these buyers have locked in and any gains that the market experiences over the coming months will be theirs. If you believe that the market is going to continue to grow at its current pace, you might feel okay about paying a bit too much today in an effort to avoid paying much more tomorrow.

I’m not suggesting for a moment that a $30,000 overbid will be the prudent thing to do in most situations, but you will likely need to think beyond what the home is worth today if you truly want to be the successful buyer in a bidding war. Try to give some thought to where you think the market is going for homes in your price range. Will prices increase 10-20% over the next few months? How many opportunities will come up over the next few months? How might rising prices and limited inventory affect your ability to secure a suitable home at an affordable price if you miss out on this one? Is the property you’re considering underpriced for today’s market (some are)? Ask your agent for his or her thoughts on what price the home will sell for when all of the offers are in.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

They expected schools and playgrounds would eventually occupy the vacant space that sits at the center of Saskatoon’s Briarwood neighbourhood and some paid a premium for the opportunity to be close. Now that those plans have been scrapped by both school boards there are some lingering questions about what will become of this land.

North Ridge Development Corporation and Boychuk Construction Corporation are both proposing a rezoning of that land to accommodate residential development. North Ridge would like to develop 17 lots in the northeast corner of Briarwood Park and Boychuk has their eye on a parcel across the park for 27 new homes.

Residents seem most concerned that the city takes some measures to soften the blow of the lost schools by insisting that the development takes into account the fact that many of these homes were constructed to enjoy a park view and not the backyards of neighbouring homes.

They’d like to see some green space to provide a bit of a buffer between the new and existing homes. The Municipal Planning Commission seems to be somewhat onside and has sent a memo to city administrators saying they won’t support the plan without changes which include adjusting North Ridge’s proposed orientation of the new homes and incorporation of linear or pocket parks.

Norm Fisher

Royal LePage Vidorra

You might say that residents of Saskatoon’s Nutana area have their “shit in a knot” over proposed plans to build a new sewer lift station in Rotary Park and who could blame them. The idea of dealing with raw sewage in your back yard isn’t exactly appealing to anyone. City administrators are recommending council approve plans for the construction of the new lift station near the Senator Sid Buckwold Bridge in Rotary Park.

It seems that there are concerns about the ongoing viability of the existing lift station located across the river in Victoria Park. It’s been in operation for close to a century and the underwater pipe which transports sewage across the river hasn’t been inspected since 1911. City administrators favour the new location because the estimated cost comes in about $600,000 lower on that side off the river.The annual cost of operation will also be lower by approximately $15,000.

The new lift station would include public restrooms and the city plans to landscape to prevent the station from becoming an eyesore. Odour control equipment would be installed in an effort to minimize foul smells but it’s doubtful that it could be eliminated totally.

Councillor Charlie Clark who represents the area on City Council says he will not support the move.

Councillor Pat Lorje who represents Riversdale where the current lift station operates is fully behind the change. “Words fail me,” she said. “I understand the ‘not in my back yard’ syndrome….when you have professional engineers recommending a specific location, they’re not doing it for frivolous reasons…I don’t think it will have that large of an impact on the neighbourhood.”

I could go either way on this, as long as they keep it operating in a public park. :) Sheesh!

Norm Fisher

Royal LePage Vidorra

If you’ve spoken to a Saskatoon real estate agent lately, you’ve undoubtedly been left with the impression that the market is hot, and it certainly is. It’s very easy to lose perspective though because we most often hear the exceptional stories repeated.

You might have the impression that all homes listed are attracting offers in excess of the listed price and that’s simply not true. I thought I’d give you a bit of an overview of the sales activity from last week to give you a truer picture of what’s going on.

The following chart shows the total number of residential sales in each Saskatoon area (geographic definitions below) followed by the number of homes that sold below the asking price, at the asking price, and above the asking price.

The next chart shows the average list price, average sale price, and the average overbid where homes sold above the asking price.

Even I was surprised to find that over 50% of residential listings are still selling below the list price, though marginally. Fewer than 25% are actually selling above the list price. It’s very clear that on average sellers are receiving offers that are very close to the asking price but you can’t assume that you’ll need to pay more than the list for every Saskatoon real estate listing.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

Over the past 16 years, Patrick Wolfe quietly purchased a block of decrepit residential properties, one at a time, in the Pleasant Hill area of Saskatoon. A wiser investor may have wondered what the hell he was up to. Few would have ever thought that his investment would be a key component in renewing the Pleasant Hill neighbourhood but last night his plan became clear as Wolfe saw his land sale proposal to the City of Saskatoon move forward in a deal which netted the savvy investor $1.4 million dollars, and a $365,000 donation receipt to boot. City Council approved a deal to purchase 29 properties from Wolfe with the intent to clear the land for use in a Pleasant Hill renewal project which will ultimately include new housing development, a much needed elementary school, some green space, and a possible community group space.

Earlier this month, Mayor Don Atchison, Premier Lorne Calvert, and National Revenue Minister Carol Skelton announced the details of a cooperative initiative between the city, the province and the federal government to begin some much-needed redevelopment in the Pleasant Hill area.  The renewal project will be funded through the Urban Development Agreement with $1.71 million coming from the City of Saskatoon. The province and the federal Department of Western Economic Diversification will each pick up $789,471 of the cost.

Negotiating the purchase of the only three properties on the block which are not owned by Wolfe is underway. Once complete, the wrecking ball will start to swing and some new life will find its way into the Pleasant Hill area.

Let’s hope that this new development provides an opportunity to rejuvenate a community that could really use a boost.

Congratulations Pleasant Hill residents.

Congratulations Mr. Wolfe.

Norm Fisher

Royal Lepage Vidorra

All of the declines in Saskatoon’s average selling price can be attributed to the category of single-family detached houses which dipped to $190,652 in January from their peak of $199,255 in December. The decline doesn’t really serve as an indicator that prices are going down, rather an absence of a few larger high-end sales which were present in the December stats.

Condos, on the other hand, took a massive jump forward on the price scale leaping from an average of $144,363 in December to $161,279 in January. This particular market is showing some real strength. It seems that consumers are feeling strongly that prices will rise and they’re willing to pay a hefty price in the condo market for what still feels like an affordable home. These units also appear to be a target of out of province investors looking to place money in Saskatchewan.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher Royal LePage Vidorra