By now you’ve read the headlines and seen the news, the Toronto Real Estate market is hot hot hot, especially for sellers!
A shortage of inventory and an increase in demand means homes are selling faster than ever and well over the advertised asking price. So, what does this mean for buyers? Should you postpone your purchase and “wait out” this competitive Toronto market?
Each year spent waiting costs you 7-10% (last year’s $700,000 semi-detached home is now selling for $770,000). Although the current climate is a Seller’s Market, buyers shouldn’t let that scare them away from their goals. Preparation is key!
If you are a qualified buyer (you have at least 5% down payment) lenders are bending over backwards to give you a mortgage. And the rates have never been lower.
The best time to buy a home is when you have the means to do it!
By implementing a few techniques that will put your offer ahead of the others, purchasing that home may be challenging, but completely possible.
1. Get Your Finances in Order.Even if you don’t plan on buying right away, see a mortgage broker and get pre-approved (while you’re at it, ask your mortgage broker to verify your credit report for errors). Getting pre-approved allows you to shop with a critical eye and become a more knowledgeable buyer.
2. Be Realistic About What You Want, and Be Ready To Compromise.
You may not be able to purchase your Toronto dream home on a budget. But that doesn’t mean you need to settle for something you don’t love, it simply means be prepared to put some TLC into a home that is currently less than perfect. Picture your home post-renos and freshly painted. Your dream home is there, you just need to look harder to see it!
3. Be Prepared and Act Fast.
In this competitive climate, you NEED to be prepared and move quickly. Homes don’t sit on the market very long. They often sell within a few days of being listed, sometimes within hours. Work closely with your Real Estate agent, don’t wait for the weekend Open House, go see properties right away, and BE PREPARED to make an
offer before someone else beats you to it.
4. Work with an Experienced Real Estate Agent with Strong Negotiation skills.
A good agent will obtain crucial information about your potential new home from many different sources. A good negotiator will communicate efficiently with the listing agent to identify what terms are most important to the seller, and help you construct and customize your offer to those desires and concerns.
5. Open Strong with a Clean Competitive Offer.
Now is not the time for lowball and/or conditional offers. There are two conditions buyers believe are absolutely essential to their offer: Inspection and Financing conditions.
These days most conditional offers are being pushed aside. The solution? Satisfy both conditions BEFORE making your offer: ask your Realtor if the home has an existing home inspection report and send the listing to your mortgage broker. The majority of listings have a pre-list home inspection available to encourage bids. Be informed and consult with your Realtor. Discuss and analyze the comparable properties recently sold and gauge what the market is doing this week. An experienced realtor develops a “feel” for how many buyers a home will attract, based on how many homes are currently on the market and how many “showings” a home has or will receive.
Improve your chances by including an earnest “deposit” cheque with your offer, be flexible with your possession date, and make sure your offer isn’t cluttered with trivial conditions.
A competitive, clean offer will give you an advantage over all unprepared buyers.
If you are qualified and ready to buy a home, don’t let the “seller’s market” intimidate you away from your goal. In the current Toronto Real Estate market, information is king. Be prepared and have an experienced and trusted advisor at your side advocating and negotiating on your behalf. Feel free to give me a call, I’d be happy to help.
Happy House Hunting,
Alex