Real Estate Talk:
The perfect property
There is no perfect property when searching for a home
By Joseph Marovitch
June 16, 2023
There is no perfect property when searching for a home. Every property has an issue. If all properties were perfect there would be no individuality. We would all be the same. Many buyers search for the perfect property, and if there is any issue, blemish, or a mouse in a pipe, the buyer will stop the sale. This is not everyone, but it is many.
I have had buyers tell me the colours are not to their taste or the basement is humid, or the garden is too small. These comments are rarely accompanied by the positive qualities of the property. It is actually quite natural for many people to point out the negative in any situation before the positive. The problem with this type of thinking in real estate is the buyer can miss the positive qualities and the opportunities the “negative” issues present.
Many buyers search for the perfect property, and if there is any issue, blemish, or a mouse in a pipe, the buyer will stop the sale.
A property with structural issues presents the opportunity to reduce the purchase price, renovate and increase the value of the property. The property with cosmetic issues also provides the opportunity to upgrade and increase the value of the property. The gain in both situations can be cashed in when selling or refinancing.
When searching for a property there are three criteria to assist in the decision to purchase.
The first is to determine how many pros or cons the property has based on the buyer’s criteria and can the buyer benefit from the cons.
The second criteria is what can the buyer afford and how much can they afford to invest in the property. A buyer should not overextend themselves financially as it is the worst feeling in the world to have big expenses but not enough cash flow.
The third criteria is what I call the “wow factor.” There are times when a buyer enters a property and instantly says wow, this is for us. The property may need a cleaning, paint, an extra bathroom or an upgraded kitchen, but the light and space inspire the buyer.
‘… if a buyer is searching for the perfect property with nothing required, they will be searching for a long time.’
All purchased homes will usually require renovations or upgrades depending on the individual buyer’s taste and needs, however, if a buyer is searching for the perfect property with nothing required, they will be searching for a long time.
The only place I can think of where you purchase a space with nothing to do is a 5-star beach hotel for a week or two.
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Next article: Customer satisfaction
State of The Market
CPI today (inflation rate) 4.41%
Bank of Canada interest rate 4.75%
Well, the Fed did it and before January 2024, when they said they would wait until. The Bank of Canada raised interest rates 25 basis points to 4.75% with inflation remaining above 2% and a “thriving Canadian economy” as the reasoning. This caused Canadian banks to raise their prime rate to 6.95%. Whether this rate hike will reduce the inflation rate to 2%, which the Fed is aiming for, is questionable. What it will do is create more household debt, reduce property values, and increase carrying costs.
‘… this bump in the real estate market may provide an opportunity for buyers with cash to purchase property at a discount.’
As a note, when I purchased my first home in 1991, the interest rate on my mortgage was 22%. For those from my generation, these rates are not the end of the world.
However, this is today’s reality, and this bump in the real estate market may provide an opportunity for buyers with cash to purchase property at a discount.
Have a great week!
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Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible for, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or firstname.lastname@example.org