Buying in a seller’s market? It’s not necessarily a cause for concern. Consider the following 5 strategic tips that can help you get ahead of the competition and simplify your experience.
1. Always get a mortgage pre-approval
Before you start saving stand-out homes and arranging furniture in your head, make sure your financing is in place. Ensuring you have a mortgage pre-approval and down payment ready to go means you can act fast when a home you love hits the market.
You’ll also want to get a good idea of your total purchasing costs (including closing costs and miscellaneous fees) and set that money aside.
To make sure you don’t purchase too much house, understand your financial capacity for monthly costs (mortgage payments, insurance, property tax, utilities, etc.) so you focus your search on appropriately priced homes.
2. Have a flexible mindset
Buying in a seller’s market doesn’t mean you won’t find a great house at the right price, but it does mean you might have to compromise.
This can look like waiving certain offer conditions to entice sellers into a quicker, less complicated sale.
It can also look like making concessions on your wish-list for things that were “nice to have”. Maybe you thought a home with an in-ground pool would be nice to have, but in a competitive real estate market where homes are selling fast and for more than their list price, you might want to concede the pool for the home in your ideal school district that’s well within your budget.
3. Analyze the market
People hear the term “seller’s market” often, and while the fundamentals are easy enough to understand (there is more demand than supply), there are always nuanced characteristics that define the market at a particular time.
Understanding the specifics, such as the average selling price of properties similar to yours, how long homes in your area are taking to sell, and buyer expectations will help you and your realtor formulate a strategic plan to easily navigate the market to get ahead, and craft offers that help you stand out.
4. Consider a preemptive offer
A preemptive offer is one that is presented to the seller before the designated offer date. If you are confident that you have a strong offer, this strategy can help you avoid bidding wars and multiple offer scenarios.
5. Hire the right realtor
The agent you choose to work with can make or break your experience. Do your due diligence when researching and interviewing potential representation. Consider someone who:
- Has experienced all kinds of market conditions, and isn’t intimidated by potentially low housing stock and quick sales
- Is intimately familiar with your ideal neighbourhood
- Knows the housing stock, history of the homes, the other agents in the area, the types of homeowners, and the typical buyers
- Has demonstrable negotiation savvy, because in a seller’s market this skill is of even greater importance than usual
The best time to buy is when you’re ready. Regardless of market conditions, you can find the perfect home if you work with the right realtor and enter the market with a well thought out strategy. Consider following these five steps to help you maneuver through Toronto’s competitive seller’s market.
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