As you likely already know, the real estate market in Southern Ontario is extremely hot and showing no signs of cooling down. House prices are forecast to continue increasing rapidly during 2017 as inventory remains low and builders struggle to keep up with the rising demand for new and affordable housing. Extremely low mortgage interest rates are further fueling the market. As a seller, this is great news as you are in full control of the sale and if your house is priced right, it might be sold in a matter of days if not hours after listing.
However, on the buyer’s end of the spectrum, the market is tricky to navigate. You might wake up in the morning, see an email from your real estate agent or a new listing on realtor.ca of a house you really like, yet by the time you contact your agent in the afternoon the house is sold. The market is moving extremely quickly and any hesitation can make the difference between landing that house you really want or continuing your search. It can be very frustrating for buyers and makes it all the more important that you have a real estate agent who is on the ball and acts quickly on your behalf.
Here are some useful tips I would like to share with buyers to help increase your odds of landing that house:
Act Quickly! – It should go without saying that in the current seller’s market, when you see a listing for a house you are interested in, act immediately! Don’t hesitate in contacting your real estate agent to get a viewing scheduled for as soon as possible. You have a short window in which to act, so take advantage of it before it closes.
Be pre-approved on your mortgage – Ensure that your lender has properly pre-approved you. This means going through the thorough checks of your financial and credit situation. Make sure your credit is in excellent shape, your income is verified, and that your lender is satisfied enough with the information to be lending you the money you need for the mortgage. This is extremely important for you to be properly vetted by the mortgage lender, as with multiple offers the less conditions the better. You are not limited to the big banks and it helps to shop around and see what different mortgage brokers are offering as well. They may have solutions and access to options not offered by the banks. Even if your credit isn't in perfect shape, speak to a mortgage broker as they have options which may work for your particular situation or be able to put you on the right path for future mortgage qualification. Either way, bank or broker, make sure you have the pre-approval and not just a quick pre-qualification.
The fewer conditions, the higher your chance! – If you submit an offer on a property and have three pages of conditions and other offers have far fewer conditions, the chances of your offer being accepted could be hampered. Waive the unnecessary or fickle conditions and keep only the most necessary ones. Having the knowledge of a great real estate agent who really knows and understands their local area and market can really come into play on this. I would never advocate for anyone to waive the home inspection clause, yet it is a big one to a seller if they are considering your offer against an offer not dependent on the home inspection. The home inspector could find concerns and issues with the house that you might not otherwise catch. Dropping this condition can let the seller off the hook and could cost you, the buyer, a lot of money in future repairs. Again, use the knowledge of your agent and your own discretion when removing any conditions to make your offer more appealing to the seller.
How much is the house worth to you? – Are you going to be comfortable going to bed at night after an unsuccessful offer and finding out that your offer was $1000 less than the accepted offer? Consider how much you are willing to spend on the house and have your real estate agent work through the mortgage numbers with you. Paying an extra $5000* over the asking price could mean something as little as an extra $20* a month on your mortgage payment. Broken down into simpler terms like that, with the low monthly payment increase on your mortgage, what are you truly willing to spend on the house? This leads us into our next point…
Do not low ball the seller – In a seller’s market, the seller is in control of the situation. They have most likely worked closely with their real estate agent to establish the price of their house based on the market and comparable sales in the area. If you come in with too low of an offer, or even if you simply come in below asking price, your offer might not even garner more than a quick glance. Chances are that if there are multiple offers, there are also multiple people willing to pay the asking price if not going above asking. Put your best foot forward from the start. More than likely you only have one chance at the seller accepting your offer, so make your initial offer the best offer you are willing to present.
Make a large deposit - The larger your deposit, the more serious you look to the seller. The seller wants to see that you have a high intent to purchase their property and a large deposit can be indicative of that intent.
Take these helpful tips to mind, work with a real estate agent who really knows the market and area you want to purchase a home in, put your best foot forward and good luck in obtaining the house you really want!
If you wish to find out more or are looking to purchase, or sell, call, text or email me today. (705)890-3168 or firstname.lastname@example.org I can also be reached through www.callinnisfilhome.ca or http://www.facebook.com/callinnisfilhome
(* - numbers used as examples only and liable to change based upon mortgage interest rate, down payment, amortization term and other variable factors. Speak to your mortgage broker or real estate agent. We also suggest that you seek legal advice on any offer due to the inherent risks.)