My son and his wife just purchased a house which will close this summer. I think they paid way too much, should I say something? – CONCERNED PARENT
DEAR CONCERNED: It might appear that they overpaid when observing from the sidelines. If you’re not currently active in the real estate market and keeping up with prices on a day-to-day basis, it’s understandable that the cost of the house may seem inflated compared to what you paid for your own.
A “reasonable price” in today’s environment might surprise you. The market in Waterloo Region is one of the strongest and most stable in Canada, and is getting stronger. Our average sale price is up about 50 percent in the past four years and continues to appreciate handsomely. Currently, in the spring of 2020, the average detached home sells for about $560,000 and has doubled in value over the past decade.
If your son and daughter-in-law have been shopping for a while, the price they paid will likely make sense to them. I find that as my own buyers gain market experience, they develop an expertise in their price range and can determine the value of a home quite accurately, based on what we’ve seen.
Locally, our inventory levels are low and have been for the last three or four years. On top of that, the seller’s market we typically experience in early spring has been exacerbated by the COVID-19 pandemic. If your kids found themselves in a multiple offer situation, which is not uncommon, someone had to bring the highest or most desirable offer based on price, closing date and conditions.
On the listing side of my practice, I frequently see offers that are uncharacteristically high or uncharacteristically low. These can present for a variety of reasons, but often come down to someone not fully understanding the value of the property.
PRO TIP: Most buyers start out browsing online, but there’s nothing like being in the trenches to really get a feel for what their money can buy. When it comes to determining a price that makes sense, buyers who’ve seen a number of properties should trust their gut – and an experienced Realtor. If you had health concerns, you would make educated choices, but still rely on the advice of a medical professional. The same applies to real estate. #AskDavid #Advice