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It’s an all-too familiar occurrence in the current Niagara real estate market.
In the process of buying their first home, Ben Gigone and his wife expressed interest in a property listed at $750,000, only to be told any offer “wouldn’t be competitive” unless it was $80,000 over asking.
There was frustration at not knowing how much to offer in a blind offer system, and worry the couple was potentially overextending themselves.
“We’ve all experience that or have family members or friends that have experienced that,” Gigone said.
Gigone, alongside co-founder Matt Pizzo, will be launching Manr, an online platform that will allow buyers and seller to list properties for a flat fee, without the involvement of a realtor, in an open offer system.
“Just trying to make that process really transparent and really simplified so whether you are buying or selling, so it’s not that ‘hidden boys’ club,’” said Gigone.
The website is launching in Niagara — to start — in April, with listings on the Manr website as well as the MLS system.
For Pizzo, starting Manr in the place he was raised made the most sense, and Niagara’s strong real estate market didn’t hurt. In January, the benchmark price was $748,800, a 33.4 per cent increase from the previous year.
The site will offer the same services one would get with a traditional realtor, said Gigone. Manr will set up a pre-inspection, along with a stager and photographer, and a representative will do open houses and private showings.
“We’ll set a date that the seller would like to receive offers by, but because we’re eliminating that middleman, as soon as offers come in, the buyer is able to see them right away,” said Gigone.
And minus any realtor fees. Manr is charging a flat fee of $7,500 for every home 278 under sqare metres (3,000 square feet). Fees scale with size, but are “never commission-based,” said Gigone.
Their hope is offering open bids will help first-time home buyers, who are running up against a market with low inventory, rising prices and mature equity buyer competition, will be able to compete, without getting “bullied out of the market” or financially overextending themselves.
“Our goal is to work with (sellers) to make sure we’re listing appropriately, knowing that you’re still going to get full value for your house. You’re just going to give people that may otherwise not have a chance to bid and be competition, that chance to get into the market,” said Gigone.
Pizzo added, “It’s really just about making it simple and approachable. It’s been over-complicated for a long time.”
Both Gigone and Pizzo acknowledge their limited experience — Gigone’s background is in engineering, and Pizzo’s sales and economics — so they created an advisory team, including an investor with more than 30 years of experience in real estate, to help them understand the “deeper, finer points in the market.”
“We’re really aiming to build a team that has been through the different cycles — buyers’ markets, sellers’ markets, flat markets and everything in between,” Gigone said.
Asked why a seller, in a seller’s market, would use this platform rather than a blind offer system, Pizzo said open bidding has done well in other markets.
Doug Rempel, president of Niagara Association of Realtors, said 70 per cent of real estate transactions in Australia, which saw its average home price increase by 29 per cent, are through open bidding.
But he said the current competitive market in Niagara is a result of a lack of inventory and government inaction, and not the fault of realtor commissions.
“A prudent buyer should come to the offer process knowing their buying power by way of being pre-qualified and having the discipline to not exceed it,” said Rempel. “A realtor can lend support in keeping reality in check, giving guidance and support backed up with market knowledge and negotiating skills.”
Gigone said he expects to see some push back, but Manr is another option available for buyers and sellers.
“At the end of the day, there’s lot of room in the market and we’re hoping to provide a space for some people that are looking to save and do things a little bit differently.”
