Modern Money - Buying real estate in a sellers market

2020 was a challenging year.
From job loss to family loss, we've all been touched by the wrath of Covid-19. Simple tasks like grocery shopping and visiting friends have been turned into challenges and the closures of many businesses and mounting job losses is heartbreaking.

Amidst such turmoil, one might imagine a shift towards a buyers’ market from the long-standing sellers’ market. With health concerns and the general uncertainty of life, adding substantially to one’s debt load via the purchase of a home or cottage would be the last thing on people's mind.
However, such is not the case.

With a second lockdown in December 2020, buyers are seeking refuge in their homes.
Contractors are busy building fences, pools, decks, updating kitchens, making home office space, etc.  Not only are they having trouble matching demand, they cannot easily buy the supplies they need for their projects.
The desire for more and smarter space is at an all-time high. Affordable lending rates have aided the surge in sale volumes and prices. Hence the sellers’ market lives on!

But you're trying to buy in this market. You’ve toured more houses online than you care to think about. Your realtor has written numerous offers to purchase on your behalf.
What’s missing? ... the SOLD sign on a property that YOU just bought!

The key is getting set for success, not disappointment.
Here are three key items to consider when you find yourself in a “bidding war” in this highly competitive housing market.

Be represented
As with most things in life, it pays to talk to the professionals! You're not a dentist; that’s why you hire one. You're not a lawyer; that’s why you hire one. And you’re not a realtor; that’s why you hire one. What is likely the biggest purchase of your life should not be taken lightly. Realtors know markets and have access to crucial information. Sign a Buyer Representation Agreement and make sure your best interests are at the forefront of your deal. Remember that the seller is paying for your realtor of choice to represent you. Take advantage of that and get well represented. 

Be educated
Once you’ve narrowed the search for what your ideal property looks like, find out from your realtor what similar properties in the neighbourhoods are actually selling for.
For example, your budget is $1,000,000. You’re doing some research on realtor.ca and come across listings for $950,000 and $975,000. However, recent sales of comparable properties have been $1,100,000 to $1,200,000. Knowing this in advance is going to save you, and your representative, a lot of valuable time. Know the market you are trying to buy into; it's critical. This saves undue stress and heartache of getting your hopes up for what is destine to be disappointment as you get out bid. 

Be prepared
As with any deal in any market, the cleaner the deal is the better. This is especially true in the sellers’ market. Put yourself in the seller’s shoes; the fewer “escape” clauses you have in your offer, the stronger your offer is. Take advantage of existing surveys and home inspection reports from credible sources. Get a mortgage pre-approval.  Confirm financing is in place when you find the perfect property. Having the pre-approval in advance of property hunting will ensure most of the heavy lifting is done when it comes to this financing clause. This minimizes the time period needed to secure financing and thus, a stronger offer. To make your deal stand out, be prepared with your deposit cheque. Submitting your deposit cheque with your offer shows an added layer of security to the seller that the deal won't fall apart on account of a delayed delivery of the deposit cheque. 

if you've got real estate questions, I invite you to connect with me via email at mpmovesrealty@gmail.com 

This article is not intended to solicit clients currently under contract with an existing Buyer Representation Agreement and/or Listing Agreement. The opinions and concepts expressed are deemed by the author to be valuable in pursuing property to purchase and by no means is this list exhaustive in nature.