Prices are high, inventory is low, and there are multiple offers for over asking price for nearly every home that sells. We are, without a doubt, in a seller’s market.
This is a challenging market to be in for any buyer, whether you’re a long-term investor or a first-time home buyer, the complications are the same.
The Canadian real estate market is hot, in particular, the Vancouver Island and Greater Victoria area.
If you’re looking to purchase a home in this area you need to be prepared well in advance.
Here are a few tips on how to buy a home in a seller’s market:
Pre-approval is a must-have when purchasing a home in a seller’s market.
Knowing the amount which you can afford to spend on a home will allow you to make offers accordingly and stay within your budget.
Also, many sellers will turn down an offer that doesn’t include pre-approval. They see this as a risk that the deal may not close as scheduled and they would prefer to have a ‘done-deal' regardless of the amount offered.
Be Prepared for Bidding Wars
A seller may receive numerous offers which in turn, gives them the negotiating power. In this case, be prepared with your counteroffer if you really like a home and don’t want to miss your opportunity.
Searching for homes below your max budget will ensure you have room to increase your offer and give you more opportunities to get the home of your dreams in the case of a bidding war.
Make Strong Offers from the start
Putting in a strong offer from the start will give you a better chance than you’ll have in a bidding war.
Wasting your time with low-ball offers in this market will only work against you.
Come in strong from the start and remember, unconditional offers are a seller’s preference. If you’re able to make a strong offer with no conditions, your chances will increase substantially.
Write an offer letter
A handwritten letter submitted with your offer may not win you your dream home. However, if it comes down to 2 or 3 offers that are close in price, your chances will increase greatly with the added personal touch.
Tell the seller why you like the home so much, what your plans for the home are, and how you envision you and your family making memories here.
If you’re a first-time buyer, advise the seller of the struggles you’ve faced in your attempts to buy a home in such a hot market, also let them know why you’ve fallen in love with their home.
While all sellers do want the best price for their home, not all of them are so focused on the almighty dollar. Many sellers want to know the home is going to be taken care of and enjoyed by the new owners.
A letter doesn’t guarantee you anything, but it definitely won’t hurt your offer!
Expand Your Search Area
Expanding your search will give you access to different styles of homes, neighbourhoods, and opportunities.
Looking into new builds on the outskirts of the city or other property types is another way to expand your home search in a hot market.
If you’ve been looking for a detached home, but everything in your area is receiving dozens of offers, a large townhouse might be something you’d be open to considering.
Your dream home may just be sitting an extra 10-minute drive away!
Work with a Trusted Real Estate Agent
A trusted agent can help you in difficult situations. They have the experience, knowledge, and know-how to handle a Seller’s Market and will advise you accordingly when it’s time to back away from a home or to increase your offer.
Working with an agent you trust also means you won’t be touring homes that aren’t in your budget or to your liking. They may also be able to present properties to you that are not yet listed or new neighbourhoods that are in the planning stages and not publicly marketed.