How a desperate letter helped a Hamilton couple win a bidding war against a Toronto buyer
Sales representative says letters can help buyers compete with developers
After spending 10 months searching for a home to start their life together, Brett Miller and Candace Beres said they almost lost all hope.
They are engaged to be married and were looking to buy their first home but were being priced out of their hometown of Hamilton.
Then a listing popped up in March — a one-and-a-half storey home with three bedrooms and one bathroom, priced at $499,000. Beres said the family selling the home originally built it and had lived there since 1953.
"Our max budget was $630,000, which is what we bid for it," the 33-year-old said.
Then, this offer mirrored countless others they made.
"We got a call from our realtor that a bully offer had been made ... we were outbid by a couple from Toronto," Beres said.
She and her fiance had five hours to make another bid.
"I just sat down and thought, 'A piece of paper with the amount of money I'm able to offer isn't enough to showcase my story,' " Beres said.
She took a chance. Beres wrote the sellers a letter, describing how she and Miller wanted to stay in Hamilton and find a home to begin their life together. She also wrote they wanted to keep the home the way it was instead of re-arranging the insides and flipping it.
About six hours later, they got a call — the letter worked.
"It took me a while to believe it actually happened. I fully expected not to get it because we had so much disappointment for so long," Beres said.
Nigel Garcia, a sales representative with Coldwell Banker Real Estate in Hamilton, said he never recommended buyers use letters before, but started doing so because of the booming housing market full of bidding wars. He said he has suggested a letter to two clients and both times, the letters worked.
"You try to make an emotional connection with the seller ... smart purchasers will do a little bit of research on the seller themselves before they write the letter," he said.
Garcia said he doesn't recommend letters often though because the more they appear, the less special they become.
Developers compete with first-time home-buyers
Beres' happy ending follows news of a Toronto-based developer's plans to buy single-family homes in cities including Hamilton and St. Catharines and rent them out.
Core Development Group's $1 billion plan is to buy, renovate and rent about 4,000 ground-level suburban homes across Canada by 2026. It wouldn't say how many of those homes will be in Hamilton or St. Catharines but previously said it included various cities in its plan because of their low vacancy rates.
Beres said she's upset to hear people still in the market have to face off against developers with deep pockets.
"It can't just be the top one per cent and two per cent that can get into the market," she said.
But Garcia said letters could give families an edge over developers like Core because of their personal touch.
While Core released a statement saying its plan actually helps people who can't afford a home, they refused to answer any further questions.
Each home Core buys will have a secondary unit added on, which it said in the statement would double the housing supply by providing two rental units on one property.
"Core's goal is to provide stable, secure long-term rental properties in ground-oriented housing for those that are not in a position to buy, but do not want to be relegated to condominium rentals with limited space for themselves or their families," read the company's statement.
Housing and poverty groups have concerns
Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction, says he isn't convinced it'll help anyone but Core.
"We're not talking about a mom-and-pop shop that's setting people up in nice little family houses, we're talking about a multi-billion dollar corporation that will be there to just reap as much return on their investment as they can," he said.
"We know people are being priced out of their homes and into situations of homelessness. This move looks like it will only exacerbate that trend and continue to drive prices up."
WATCH: Lifelong Niagara region resident priced out of her hometown
Core told the Globe and Mail the rate for its two-bedroom basement apartments is about $1,600 per month while its three-bedroom above-ground unit goes for roughly $2,100 per month.
The latest market rental survey from Canada Mortgage Housing Corporation (CMHC) states the average rent for two-bedroom apartments in Hamilton is $1,291per month and three-bedrooms go for an average of $1,511 per month. In St. Catharines, those rates are even lower, at $1,137 monthly and $1,260 respectively.
Betty-Lou Souter, Community Care of St. Catharines and Thorold's CEO, and Catherine Livingston, Community Care's housing manager, said many local families won't be able to afford Core's rates.
"Then you run into the social ills of how do people live together in those houses? I have a lot of concern," Livingston said.
Real estate advisory firm supports Core's plan
Ben Myers, owner of Bullpen Research and Consulting, said he's shocked to hear all the criticism toward Core's plan.
He said buying homes will drive up house prices, but will also decrease the demand for owning homes. He said with Core adding more rental units, the cost of rent will fall.
Myers also dismissed criticism about Core's rental rates.
"The argument that adding expensive supply is somehow bad for the market is just the dumbest thing I've ever heard. There's always going to be people that have money to afford the more expensive units ... if those people are moving into those expensive units, they're no longer renting the cheaper units," he said.
LISTEN | When big money buys up homes to rent
Myers added that if people want home prices to lower, the country needs to build more homes, but people don't want to do that at the expense of the environment and more sprawl.
"If you don't want a corporation taking away supply, well you should probably also want there to be more supply of that housing type," he said.
Livingston and Souter said they have concerns about what will happen once people start renting, citing a growing number of renovictions and homeless families.
"Is there a community where this has worked and has it improved the housing situation for people? Give us an example," Souter said.
Cooper said the federal government needs to do more to combat income inequality and the housing crisis.
"It's past time for the federal government to jump in and put some strict regulations on these types of activities and you can't really call it a monopoly but it's like a monopoly," Cooper said.
"Housing is a right in this country and so how are we going to enforce that as a society?"
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