6 tips for buying in a sizzling hot market
story by Janet Lees ❧ illustration by Robert Carter
While a seller’s market, by both name and nature, favours the seller, today’s hot market can be a daunting prospect for buyers. “It can be uncomfortable for a buyer to be told they are buying in a seller’s market, especially if they are not familiar with the area and what is happening,” says Emma Baker of Clairwood Real Estate in Collingwood.
Here are a few tips that can help ensure success as a buyer in a seller’s market, especially when you are bidding against other buyers.
1. Time is of the Essence – When properties are being snapped up before you take your dinner out of the oven, timing is important. “A hot market doesn’t often allow you the luxury of time to mull over things that you might otherwise may want to think about,” says Baker. “You like the house, but you want to think about it overnight and maybe go back on the weekend? Chances are it will be too late.”
Time is of the essence, so if you decide that this is the house you want, it’s time to write up the offer without a moment to lose. A delay can create the opportunity for other buyers to come forward and you can end up in a multiple offer situation. “You are better to get your offer in and use your conditional time for those extra visits, contractor quotes, etc.,” advises Baker.
2. The Price Must Be Right – Seller’s markets are not the time to look for a bargain property. With few houses on the market in relation to the number of buyers looking for a home – including buyers for whom price is no object – you must be prepared to compete on price or you may risk losing out on your dream home.
“When you are competing against another buyer, you only have one chance to put your best foot forward,” says Baker. “Be prepared to pay full price or even over asking.”
3. Make a Healthy Deposit – A deposit is a sign of good faith. “Show the seller that you mean business and that you are willing to put down a healthy deposit,” advises Baker. “The deposit will go towards your final payment and is held in trust until closing, so there is little risk. But if a seller is dealing with several offers at once, a strong deposit can make a difference.”
The seller needs to know that you won’t walk away from the deal, and a strong deposit can indicate just that.
4. Don’t Ask For Extras – The days of being able to get freebies thrown into the deal are over! “Forget about asking for the blue couch or the patio heater,” says Baker. “Make your offer clean, and try and stay away from asking for those little extras.”
5. Delay Buyer Possession – This little trick is not something you will see or hear of very often, and only works if you do not need possession of the home on the day of closing. “Offer to close the property, but give the sellers a few days extra to move out. This can reduce stress and give your offer an advantage over another,” says Baker.
6. Get Pre-approved – Many buyers will require financing as a condition of sale, so not having a financing condition could put you in an advantageous position compared to other buyers. “If you can show the seller that you have been pre-approved, this can give them a sense of security that the deal may not die due to financing” explains Baker. “Again, this is more a sign that you are acting in good faith, but when you are competing with others, it can help give you an upper hand.”
Buying a home in a seller’s market doesn’t have to be frustrating and disheartening. With a little knowledge and advance preparation, you can ensure that you are a winner in today’s real estate game.
Read More about Real Estate in this Issue
– Real Estate Q&A
– The Game Has Changed!
– Sell, Sell, Sell!
– Ready, Set, List!
– Buying Strategies
– The Best Bidder
– Going to the Country?
– Thinking of Investing in Real Estate?
