Will Hamilton homes sell? Some realtors bet on it
Some realtors offer to buy your house if it doesn't sell
Hamilton realtors are using a flashy, familiar tactic to capitalize on the city's hot housing market.
Some agencies are advertising on local media a guarantee that they can sell your house quickly — or they'll buy the property themselves.
“Your Home Sold GUARANTEED Or I Will Buy It!” reads one local broker’s site. “I Will Sell Your Home in 28 Days Or I Will Give You $1,000 In Cash!” pledges another.
With homes selling after an average of 36 days, down from 42 a year ago, that's only an eight-day gamble.
Pledges like these show that realtors are especially confident about the Hamilton market. They're also a measure of how fierce the competition is for potential sellers' business.
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“Hamilton, believe it or not, is one of the hottest markets in Canada outside of Toronto and Calgary,” said Ross Godsoe, CEO of the Realtors Association of Hamilton and Burlington. “Sometimes when you have that type of scenario it can lead to these types of things.”
For sellers, 'a way around the risk'
And beyond its marketing potential, the pitch may be alluring for sellers in this market who are hoping to buy a new house — because it gives them a stronger hand.
Auction-style sales or bidding wars are happening more often as competition heats up for the best listings. A seller who waits for her house to sell before she can sign for the new house might lose standing in that bidding war. Having a realtor guarantee can mean removing conditions and coming in with a stronger bid.
“Most people can’t afford to carry two mortgages,” said Susan Pauls-Valerio, a local real estate broker who offers an I’ll-buy-it program. “It’s a way around the risk.”
We really don’t want to buy the house — we’re not in the market of collecting real estate.—Susan Pauls-Valerio, realtor
Pauls-Valerio's brokerage advertises it will write a firm offer on the 29th day a house is listed for sale. The firm will leave the house on the market for 90 days. If no better offer comes along in that time, they’ll purchase the house.
“We really don’t want to buy the house — we’re not in the market of collecting real estate,” Pauls-Valerio said. “But it’s really something that our clients are really using.”
Pauls-Valerio said she added the asterisk to the claim on her website because she had to turn down a client outside of Hamilton, in St. Catharines, she said.
Otherwise, the tool has served as a bridge for sellers, but rarely comes down to her brokerage actually buying a house.
“I’ve never had to buy one,” she said. “My dad has had to buy one once in his 42 years.”
Mike Mossuto, a local agent with Keller Williams, isn’t surprised the deal doesn’t happen very often.
“The price that the agent would buy it is not going to be the price the seller wants,” he said. “That’d be like a last resort, in case they bought a house.”
Not a new tactic
That is an old game that’s been around for a long time.—Tim Mattioli, Realtors Association of Hamilton and Burlington
The sales tactic isn’t new, even for Hamilton, though you might hear about this kind of thing more commonly in traditionally hot markets like Toronto and Vancouver than advertised on local Hamilton talk radio.
“That is an old game that’s been around for a long time,” said Tim Mattioli, a local realtor with Re/Max Escarpment and president of the Realtors Association of Hamilton and Burlington. “Basically what it does is it gives the agent the opportunity to go ahead and move you into your new place.”
But in a seller’s market like this one, the approach may not be so crucial. More than 1,550 homes sold in July — a 22 per cent increase over the sales in July last year. Detached homes sold in July had been on the market for an average of 36 days, compared to 42 days last year. For condos, the time dropped in July to 39 days, from 45 days last year.
The tactic might, however, help your realtor get your business.
“Realistically, it’s not something you need,” Mattioli said. “But I’m constantly out there trying to differentiate myself from 2,700 other working realtors out there."