A Great Deal on Real Estate here on PEI

Here on PEI real estate prices are lower to start as we have the lowest average home price, second only to New Brunswick; however when we are looking at buying a property we are always asking ourselves if we can shave just a little more of the price. It is simply human nature to look for the best deal.

Generally wanting the "best deal" is essentially the same as saying you are looking for a motivated buyer. Most PEI real estate is listed through licensed real estate agents and agents will know and assist the seller in pricing their property at or very near the value. This value is based on what similar properties have sold for in the area in the recent past. As a result in is very unlikely you will get "a deal" on a property because of a vendor's ignorance of the true value of their property.

Those properties that come on the market below their true value or those vendors who will accept a "low-ball" offer generally do so knowing full-well what they are doing. There is usually another reason that they are looking for a quick sale and are therefore called motivated sellers.

The reasons for selling low are as varied as the sellers themselves but there are a few reasons that surface again and again.

The chance to better their financial situation by relocating to a new and better job will often provoke or even necessitate a quick sale and this is one of those situations where keeping their eye on the prize, the new job, means that getting the last penny for their property may not be a top priority if it means delaying or jeopardizing their move. This is a good situation for you and you should jump right in and take advantage of it. Their good fortune may be yours too!

Another all too common reason for motivated sellers and a quick sale is the looming specter of divorce. Divorce is always on the rise and sometimes this necessitates the quick sale of the family assets including the home. Sometimes divorce and a new location work hand-in-hand to motivate the sellers to go with the first reasonable offer.

As divorce is a common cause of hurried home selling so is a death in the family. Either because the surviving spouse can no longer afford the home, because the home is filled with the unhappy memory of their loved-ones death or simply the home becomes too big, although death is a rather macabre way to benefit from the lower prices afforded by the
need for a quick sale, it is nonetheless one of the four top ways of purchasing a home below market value.

The fourth and final way to "make a deal" on your next property is to buy one that needs repairs which the current owner hasn't the funds available to make. Sometimes a home just gets overwhelming. A house may need a new roof, a new furnace, or just about any combination of home repairs that adds up to an amount the current owner can not afford to spend or can't raise. This represents an opportunity for you. But remember that these are expenses which by buying this home you are taking on. So make sure that you have sufficient capital to affect the necessary repairs and that the home really is a bargain when these additional expenses are factored in.

When purchasing PEI real estate be aware that if you are a non-islander and purchasing waterfrontage or a large acreage that you will need IRAC approval. A clause "subject to IRAC approval" should be added to any offers. Also be aware that many of the homes you are looking at may be quite old and many will have sandstone foundations and clay basements. While these have lasted up to 100 years and will last many more, they tend to be a little smelly (damp) on occasion and the homes have often settled on their foundations and are crooked causing the floors to be uneven. This can feel like you are permanently drunk. You may want to consider the cost of raising the home and pouring a concrete basement when making an offer.

Just remember that while islanders are known for patience and good-will even the most patient, motivated vendor has their breaking point. Your offer may be low-ball, but it should be considered in light of the property and should not be "insulting" as then your potential good buy will simply go "Good Bye!".