Whether you’re a first-time homebuyer or looking to buy your second or third home, the process of locating and buying a property isn’t always an easy task. What can compound matters is attempting to buy a home in a strong sellers’ market—the current reality for many parts of Canada, particularly in the GTA. Here are some tips on how to navigate the buying process in a hot real estate market:
- Educate yourself: before going out to view your first home, talk with your realtor and other experts to learn as much as you can about the market you’re buying in. If you’re investing, understand what is driving the current market demand, current inventory, how fast homes are selling, list vs. sell price, frequency of multiple offers and rental related information.
- Have your finances in order: whether we like it or not, if you end up in a competitive multiple offer situation there may be pressure for you to exclude certain conditions, such as mortgage financing and home inspection. In
these situations, it is important that you have the utmost confidence that you’ll be approved for a mortgage for the home you’re trying to purchase. Also, be sure not to make any major financial changes prior to closing (e.g., taking on more debt, leaving a job, etc.). Firming up a deal without obtaining mortgage approval prior to closing leaves potential for a lawsuit—at minimum you could lose your deposit.
- Know how to recognize certain home defects: multiple offer situations may require you to exclude a home inspection condition. Therefore, it is important that you do your homework on what to look for regarding potential defects in a home (e.g., water issues, foundation issues, proper construction, fire hazards, etc.). It’s a good idea to bring someone with you during showings that is an expert on these issues.
- Remove emotion: purchasing a home in a hot market may mean that you will lose during negotiations. It’s not uncommon for some buyers to have to put in offers on a few homes at different times before they actually get an accepted offer. Attaching too much emotion prior to a firm deal can lead to a feeling of disappointment and frustration in the event an offer is lost.
Source: Canadian Real Estate Wealth Magazine
CENTURY 21 Miller Real Estate Ltd.
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