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The number of houses I have toured clients through where it’s obvious that we’re looking at a hasty reno complete with big-box kitchen and whatever colour stone slab countertop happened to be on sale that week.
There, under the sheen of fresh paint and on-trend subway tiles, is one of the biggest challenges facing buyers today: they are not just competing with one another — they are competing with investors.
Everyone from the professional builders who have agents on retainer scoping out “opportunity houses” for them to swoop in and fix up, to the novice who wants to get in on the house flipping action.
Would-be buyers must now contend with many layers of arithmetic.
What the house is listed at. The cost of any needed improvements. And what the house is likely to go for on offer night based on both comparable sales and what other properties might be in competition that week.
For the houses that need work — the classic ugly-house-on-the-best-street-you-can-afford type opportunities — that number crunching is especially important.
And while one might think that the more work a place needs, the more likely you are to land it for a steal, I’ve found that’s not usually the case.
While you may be in company with other opportunity-seekers looking for a fixer-upper, you will also likely be up against one or more builders looking for their next investment project. And given that their pockets tend to be deep and they aren’t paying retail on the renovation costs, the arithmetic is definitely stacked against you when they can afford to outbid you.
