Good morning everyone;
In the Market – The weather is taking it’s time to warm up but the housing market is not. This past week many more new listings began hitting the MLS system and buyers are feeling somewhat energized to begin/continue their hunt.
Bidding Wars – Have been the norm and will continue to be onwards.
It is the rare exception that a property is coming to market in Toronto that does not have an actual offer date attached to it. It is definitely the rule rather than the exception.
Last week I had marketed a home that took about 30 appointments throughout the week and 1 pre-inspection. I conducted an open house and had requested that offers be submitted for review at 7pm on that Sunday evening. We had 7 offers register and then 1 dropped out.
When the 6 offers were presented my clients decided to accept a conditional offer that had a bid considerably higher than the only firm offer presented. We were able to negotiate the condition period down to only 2 days so my sellers were comfortable enough to take a chance for two days to hold out for more cash.
We did have a firm offer (with deposit cheque in hand) present but it was for $11,000 less than the accepted conditional offer and we had several other conditional offers for slightly less money than the accepted offer. The 11k difference was enough for my guys. The conditions were met over the two days and deal firmed up.
Generally I advise my sellers to accept a condition free deal and in turn I instruct my buyers to go in as firm as possible (do a pre-inspection, mortgage pre-approval etc.) In this case to wait two days for an 11k difference made sense. Also we took into account the buyers’ situation. Every day they were commuting from London Ontario to downtown Toronto via the train.
They had to take the train to be there Sunday evening for the offer presentation. The buyers were motivated and serious. They would not be looking for a way to “get out of the deal” Unless something significant turned up the deal would stick – and it did. Had the firm offer been only 5k or so higher I’m sure my sellers would have taken the sure deal.
Construction Blog #3 – Return the Urban Forestry Jedi
I remember clearly asking Josh (who was actually really great in the whole tree process) from Urban forestry how long would it be before getting my permits once all the trees were protected?
You see, my building permits were conditional on fulfilling all of Urban Forestry’s conditions: i.e. protecting the trees.
He answered that it would only take 2 hours or so. I had to act quickly before March 23rd as it was Josh’s last day in that position and I did not want to get a new case worker and start from scratch – so to speak. Once the tree fencing went up I called Josh (and sent him pics) and he came to inspect. He said that my permits could be picked up the following day at city hall – GREAT!
The next day started off badly but I thought to myself –“It’s all good Tones you are finally going to get your permits”. Once arriving at Urban Forestry a clerk handed me a file and I asked “where are my permits?” She pointed to two pieces of paper. There was a permit and clearance letter to allow me to cut down the 5 trees from my application (remember construction blog #1). It turns out that only now can I actually apply for my building permits – I needed clearance from Urban Forestry first then submit for building permits.
I was thinking building permits – Josh was thinking tree permits. Oh sigh…….
On another note – The gas company has come out 3 times over the last month to disconnect my gas. Each time it was not a scheduled disconnect! Last week they cut the gas and then I had to get them to come back turn it on again in the evening.
They are back a fourth time – Today in fact – and I have no choice but have it disconnected today. If they don’t turn it off today I would have to resubmit another request and pay significant increased charges and wait another 6 weeks or longer before they would be back. We have moved out as of last week but I have an upset tenant who may miss hot water for tomorrow (the heat is electric and she does have another apartment ready to go).
Does soundproofing add value?
Q: There is a lot of information about the likely recovery of renovation costs for things you can see, like bathrooms and kitchens. What about upgrades for things you can’t see—like soundproofing or extra insulation? Any info on paybacks for those types of renovations or suggestions on how to highlight them when it comes time to sell?—Patty
A: While there is plenty of information out there on the return on kitchen or bathroom remodel investments there’s not a lot of information on behind-the-scene investments, such as extra-insulation, energy-efficiency upgrades or , soundproofing.
Theoretically, appraisers will tell you that any improvement to a home’s heat and energy efficiency should increase the value of your home. And it may. For instance, people now understand that a new roof or new windows are good selling features on a home, since these types of upgrades and replacements are expensive. But a new roof or new windows also have a visual, or tangible component—a potential buyer can tell the difference between an old, worn-out shingles and the crisp, clean lines of a new roof. But when it comes to determining what type of return-on-investment you’ll get with internal upgrades, such as soundproofing or extra insulation, I have to say it’s negligible, at best. Fact is people don’t walk into a home and fall in love with the extra fibre-glass insulation that’s been added to the attic, nor do they put “soundproof” at the top of their wish list. Not, unless, they are a studio musician.
Ask Home Owner columnist Romana King your real estate question »
So, sadly, when it comes to internal upgrades — such as fixing a rotten foundation, insulation and even soundproofing—you’re never going to see a big return on your investment. Consider it a sunk cost that should be considered only as long as it helps you enjoy your home more. Of course, you can always highlight that this work has been completed when you go to sell the home, but don’t expect that it will add any additional value to the home: People are not willing, yet, to pay a premium for a home with a repaired crack in the foundation—not when the comparisons in the market not only do not have a crack, but don’t need the repair.
That said, there does appear to be one upgrade that will add approximately 25% of its cost to the value of your home: the installation of a back-up power generator. So if you spent $5,000 to buy and install the generator, it theoretically should add about $1,250 to your home’s value.
These are inconveniences for sure but ultimately out of my control so I’m just trying to roll with it as it comes.
Next week – The big move out!
Have a fantastic weekend and glorious week, Anthony.
Photo courtesy of Victor Porof