You keep hearing “it’s a great time to sell your house”… and it is! However, if you’re trying to purchase a home right now you are facing more challenges than ever before. That doesn’t mean that it’s impossible! Your For Sale On Georgian Bay agent is here to help smooth out any bumps in the road and will be with you every step of the way.
With the majority of the Canadian housing markets being identified as Seller’s Markets, this means that most buyers, here on Georgian Bay and Nationally, will likely be up against limited housing supply, lots of competition, and the same question on their lips; how do you buy a home in a seller’s market, with the cards stacked against you.
We’ve identified some buying strategies to employ that will help you find a home in a seller’s market.
Be Informed
Having a handle on market conditions is a key first step in a successful transaction. This is the case regardless of market conditions, but especially if you’re trying to buy a home in a seller’s market. Remember, real estate is very local, so what is happening in one community might be different in another. Here’s where it helps to tap into a professional, experienced real estate agent. Every For Sale On Georgian Bay agent will be able to empower you with all the information you need to help make informed decisions.
Know Your Budget
How much can you afford to spend on a home? This is different from a mortgage pre-approval. Take into consideration your lifestyle, and what sacrifices you’re willing to make. If you’re planning to buy more home, you might have to curb your spending elsewhere. If you won’t be making any lifestyle changes in interest of home ownership, you may have to lower your home-buying budget or make some other concessions, such as the size of the home or the community.
Really Important Tip… GET PRE APPROVED!
Get pre-approved for a mortgage. This gives you an idea of how much a lender is willing to finance, and how much you can spend. A pre-approval also locks in the current interest rate for up to 120 days, so you can shop with the peace of mind that you’re insulated from rate hikes in the near future. If the rate drops, your lender should honour the new lower mortgage rate when you’re ready to make your purchase.
Be Prepared To Act Fast
If you’re hoping to buy a home in a seller’s market, you’ll need to take quick and decisive action when you find a property that interests you. For every home that you’re interested in, so are many other buyers.
Make A Strong Offer
In a seller’s market, you may only get one chance – and it’s not always about the money. A real estate transaction can be complicated with a lot of moving parts. With all other things being equal between your offer and someone else’s, one that’s tailored to the seller’s needs (such as a short or long closing) can tip the scales in your favour. Aside from conceding to the seller’s wishes, an offer in a seller’s market should have as few conditions as possible. This is where you will really benefit from the experience and knowledge of your For Sale On Georgian Bay agent. Every transaction is different and they will be able to guide you on what to include and what not to include based on the property that you’re interested in.
A conditional offer means that certain terms must be met in order for the offer to be valid. Some common conditions include:
- Conditional on financing: This is a common condition for first-time homebuyers, which requires the mortgage lender to sign-off before the deal can go through. The buyer has a few days to get this, and the process will include a home appraisal. If the lender does not agree to finance the property, the buyer will notify the seller and the offer becomes null and void.
- Conditional on home inspection: A home is the biggest purchase most people make in their lifetime, so a satisfactory home inspection is generally recommended. This ensures the house is in good condition before the deal can go through. If it isn’t up to par, the buyer can return to the seller and request repairs, a reduction in the price, or can rescind the offer entirely.
- Conditional on the sale of a home: If a prospective homebuyer already owns a home, he or she may want to ensure that it is sold before agreeing to purchase a new property.
Offer conditions aren’t ideal for the seller, as each one has a potential domino effect. But buyer beware! You may be tempted to remove the “conditional on financing” or home inspection condition in an effort to beat the competition. For your own protection, we recommend keeping these as part of your offer but once again, your For Sale On Georgian Bay agent will guide you through the process and react to each different situation.
Be Prepared To Pivot
After the last couple of years, you’re likely already accustomed to this as a key Pandemic survival strategy. And if you’re hoping to buy a home in a seller’s market, you’ll need to keep it up. As we all know, market conditions can change on a dime. Have a back-up plan in place, in case you need to delay the purchase – or need to jump on an opportunity sooner than expected!
Work With A Pro
Homebuyers always have the option to handle their transaction on their own, or to work with a professional real estate agent. Working with an experienced agent can ease much of the stress associated with finding and buying a home in a seller’s market. Not to mention, most of the time your agent’s commission will come from the seller’s end of the transaction thus not costing the buyer anything. Your For Sale On Georgian Bay agent will help explain this to you when you meet. Just some advantages include:
- better access to homes in and out of the local market.
- knowledge of neighbourhoods and market conditions.
- negotiating skills (not usually a factor in a seller’s market, but good to have in your back pocket!)
- we handle the paperwork – enough said.
- guidance and support in the biggest buying decision of your life.
Have Thick Skin
Last but not least, don’t take rejection personally. Instead, learn from the experience and keep trying. Homebuyers who have been living in persistent seller’s markets know the pain of rejected offers and being “beat” by another buyer. Working with the right real estate agent helps buyers see new listings as soon as they hit the market, so you can jump on “the one” when you find it. At For Sale On Georgian Bay, we’re with you every step of the way.