Real Estate Talk:
The perfect property

There is no perfect property when searching for a home

By Joseph Marovitch

August 8, 2024

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 and think the same. Where one lives and the state of their property are often a reflection of how one thinks and how their thought process is structured. Therefore, if one finds a perfect property, they have likely found a seller who thinks as the buyer does. This is rare and seldom the case.

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. The positive qualities of the property rarely accompany these comments. It is 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 property’s value. 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.
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• The second criterion is what can the buyer afford and how much can they afford to invest in the property. A buyer should not overextend themself financially as it is the worst feeling in the world to have big expenses but not enough cash flow.
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• The third criterion 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 where you can purchase, or rather rent, a property with nothing to do is a 5-star beach hotel for a week or two, or you build your own.

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State of The Market

There appears to be a shift change taking place with many factors involved. The U.S. presidential election has taken a turn with what appears to be a very positive and forceful team of Kamila Harris and Tim Walz for the Democrats. This may have a very positive effect in the long term on the economy and housing market.

The next factor is the inflation rate which has been reducing and has inclined the Federal Government to consider future rate cuts which will increase the demand for housing.

Another factor is many mortgages are coming up for renewal and this may cause a further increase in supply. Many buyers purchased during the pandemic when rates were extremely low. With their renewal, these homeowners will be hit with increases from 2.1% to 4.5%. Along with higher inflation, homeowners who purchased during the pandemic may not manage the increased costs and therefore place their property on the market.

‘There appears to be a shift change taking place with many factors involved… Keep your eyes open for evolving factors and the opportunities they present.’

One more factor of course is interest rates. Those who did not purchase during the pandemic will not experience sudden increases in their mortgage rates. What they will experience is lower rates allowing them to purchase a property,

The last factor I will mention is there is a high percentage of people who are retiring. There are more seniors than middle to young age in Quebec. With age we tend to shed many of the things we accumulated over the years, including the large house we originally purchased when our kids were living with us, opting to downsize. This is another factor that causes supply to increase.

Keep your eyes open for evolving factors and the opportunities they present.

Have a great week!

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