Buying in a Seller’s Market

Buying a home can be very frustrating in a seller’s market:  homes selling before you can bid (or even see them), multiple offer situations and the disappointment you feel in losing your dream home to another bidder.

Some ideas to help:

Work with one Realtor
Find a Realtor that you like.....someone that listens to you and seems to be hard working and well connected in the marketplace.

Consider signing a Buyer Representation Agreement (BRA)
By signing a Buyer Representation Agreement, you are agreeing to work exclusively with one Realtor.  Your interests will be represented during the negotiating and buying process, as the Sales Representative’s loyalty (fiduciary duty) is to you, not the seller.

The Realtor will have more motivation to look for properties if he or she knows they will be compensated for their time and work harder to find you that perfect property.  They also can list your requirements on the Buyer Registration Service, to let other brokers know what you are looking for, thereby improving your odds.

Be pro-active
Look for Open Houses, For Sale signs, look through newspapers, magazines, on-line search engines to find possible homes.  Not every home is listed through the Multiple Listing Service and you may find the home you are looking for just by driving to the store.

Obtain mortgage pre-qualification
In a multiple offer situation the strongest buyer has the best chance of succeeding.  By obtaining pre-qualification for your mortgage, the seller knows that you have the financial means to buy the property and is more likely to accept your offer.

Best Offer
If you know there will be competing offers, go in with your very best offer first. You may not have a chance to make another one and it may even be necessary to offer more than the asking price in order to succeed.  A flexible  closing date can also be a big factor if the seller can avoid the inconvenience and cost of moving twice.

If you are comfortable eliminating some contingencies, your offer will be more favorable to the seller.  Be sure to check with your attorney to make sure you understand the risks involved. If there is time, home inspections can be ordered before the offer to eliminate that risk. 

Certified Cheque
When many offers are in competition, the winner can be determined by something as simple as including a certified cheque.  If you take the time to get a certified cheque, it can make the difference between owning a home and walking away empty handed.  Check with your attorney about possibly making a larger deposit.  It can make you seem like a more serious buyer and helps your offer stand out.

Write the Seller a Letter
Writing the seller a letter about how much you love their home can help your offer stand out from the others.  It may seem like a frivolous thing, but it can make the difference.

Be flexible
The perfect house is never really perfect.  It may have ugly pink tile, but a great floor plan, old appliances, but great cabinets.  If you can handle making some changes, even minor ones, you can end up owning the “perfect” home that no one else noticed.

While the search for a home can be discouraging at times, persistence really does pay off.  Keep looking.  Ask your Realtor if there is anything else you can do to make you a better buyer. Ask your friends and neighbours if they know anyone selling.  Who knows--you just may find that “perfect” place!

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