OTTAWA — Something new has emerged in Ottawa’s hot housing market that could make buying a new home even more expensive.
Homebuilder Cardel Homes is starting an online blind auction for buyers to bid on three new builds that will be move-in ready in about a year.
“It’s really the same product, just packaged up a little differently,” says Tanya Buckley, VP of sales and marketing at Cardel. “The demand has become so high. We’re looking at that resale market model and saying, this is what people have been doing in the resale market, we’re sort of looking at that for the new home market.”
Bidders need to first show proof of mortgage pre-approval to be qualified to bid, and must also put down a $1000 deposit that will be refunded if they don’t win.
“You know we can buy a car online, why can’t we buy a house online?” Says Buckley. “And I think, as home builders, we just haven’t conceived of it, packaged it up, offered it.”
Real estate agent Geoff Walker of Walker Real Estate Group – RE/MAX says he’s not surprised to see this happening in such a hot market.
“This is a builder that is obviously taking a new initiative in the new construction world,” says Walker. “Most builders, they’re selling out in minutes of their releases. So, this is an opportunity for a builder to potentially obtain more money, but also see what the threshold is of what buyers are willing to pay.”
And they are willing to pay a lot. The three homes available have minimum opening bids that range from $765,000 to $833,000.
Bidding opened at noon on Tuesday and Cardel is already seeing offers flood in.
“New construction is a business,” says Walker. “And if the consumer demand is there, the business objective, part of it, is to get as much money as possible.”
Cardel says they wanted to give home buyers more options than the standard way of buying a new build, which, due to the demand, was getting harder for consumers.
“We had four town homes that we released and had 73 qualified buyers. So how do you begin to say first come first served virtually?” Says Buckley. “The idea here is that this is an approach that we plan to further develop and continue with. Irrespective of that market condition or market dynamic.”
Bidding closes this Friday at noon. The winner will be contacted by the end of the day.
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