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.
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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.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
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