se1zm1c

In the UK it's pretty much accepted that the asking price for a house is just the starting point, the owners would expect offers e.g. for a 499,950 asking price someone might just steam in and offer 450,000 etc.

What's the house buying etiquette in Canada? The same or is looking for a better deal frowned upon?

iaink

Depends on the area and the market at the time.

I paid 10% less than asking price on mine, it was a slow market. Haggling is normal.

Put in an offer less than your realtor suggests unless you absolutely must have that house. Your realtor takes half the sales commission, they have no reason to get you the lowest price IMO.

In a hot market then offers over asking price arent uncommon. One good thing here is offers are more or less binding, if they accept they cant easily back out if a better offer comes along later. And neither can you if you see somewhere else you like better.

Tangram

+ 1

We were told sellers in this city don't reduce more than $5k from asking price. I wondered what the point of a Realtor was then. We paid $20k less than asking.
YMMV.

dbd33

But the OP is looking at Toronto and suburbs, a bidding war is as likely as discounting. I think he should bid 95% or so of list and be prepared to go to list.

iaink

I guess the great thing about GTA subdivision housing is that they are all much the same anyway. If you put in a low offer thats rejected and you miss out, there will be another more or less identical place to try and buy just around the corner anyway.

dbd33

I was rather assuming that, having seen Ajax and Mississauga, he would give up on the tract house idea and look for something nice. Agreed though, if you're willing to live in a Greenpark or Mattamy housing project you can bid sight unseen on houses across the GTA and just take the cheapest.

Tangram

Sorry didn't read that.

MikeUK

Yep.. in the right suburb the asking price can be set just low enough to spark a bidding war and 150% of asking isn't uncommon

In other suburds the asking price may be a delusion, and 80% of asking can be more realistic

All depends on suburb and market conditions

Editha

You are probably right about making an offer lower than the realtor suggests, but we had a good experience with ours, when we were buying.

In '06 the market in Edmonton was very hot and prices were going up rapidly, so we were inclined to offer the asking price for the property we wanted. But, the vendors had set up an open day and our realtor advised us to wait until the open day was over, because if they had no other offer after the open day, they'd probably accept a lower price which was exactly what happened..

JamesM

Toronto remains one of the last real estate bubbles in the Western world.

Given Canada's natural lag behind the rest of the western world in almost everything I expect the bubble burst to begin at the front end of the 5-10year anomoly.

2013 will see the market correction begin.

R I C H

My philosophy when buying a house has always been to pay the absolute minimum possible, and if I insult the seller initially with a lower than expected offer, then so be it. I'm not looking to make friends.

I paid $80k, or 12% under asking price for my current house and was prepared to walk away if the seller stuck out for more. Ultimately you pay what it's worth to you, not what the seller thinks it's worth to them. Of course the type of buyer you are can help influence negotiations too - I offered a deal that didn't involve financing or any subjects, which provides a certain amount of leverage.

snowcandy

Is the same true with a new build, I wonder?

How much can you negotiate, if at all when purchasing a spec or custom built home??

JamesM

A wise and sensible philosophy that all should employ.

MikeUK

Not so sure... It's kept its "bubble" growing by keeping an ongoing growth in population...and or investors

as long as they keep the bubble full of buyers it can keep expanding, and to take one objective viewpoint, it may be considered by many to be overvalued by Canadian standards, but as the increase in buyers is largely immigrants and external investors to some of whom Toronto is seen as seriously undervalued..

Some suggest we shouldn't compare the likes of Toronto and Vancouver internally but with other prime immigration cities around the world and they would suggest that prices have a long way to go up to match the global big city market price

Editha

I think that depends on the builder and the market. Small builders are likely to be more willing to negotiate, than a large outfit where you'll be dealing with paid sales people, rather than the builder direct. However, it is always worth negotiating. In London (England), I bought a docklands flat from a large developer. It was the last on the development to be sold and they were anxious to get rid of it. I only got a small reduction in price, but they threw in carpets, curtains and fitted wardrobes.