So you want to buy in a seller's market?

What a time to be a seller! The market is showing an influx of buyers, but we have very few homes for sale. At the time of writing this blog there was 37 homes available in the borders of Owen Sound. That may seem like a lot for Owen Sound, but keep in mind that 16 of those homes already have an offer on them, in a 20,000+ population…..

Now if you are a buyer, you are probably thinking this is discouraging. It’s time to work smarter, not harder when it comes to buying into a market like this.

Step #1 - The first thing you need to do is find a REALTOR who understands what you are looking for, and understands your timeline to buy. Interview a few REALTORs and see which one your personality clicks with, and take the one that you “click” with.

Step #2 - While you get your REALTOR on the search your next step is to go to the bank. Speak with a mortgage advisor, and understand what you can afford, and best practices for your approval process. Please ask them to define exactly what your pre-approval means including timeline to a full approval, so that if you get into a multiple offer situation, you will know exactly what you can and can’t afford, and how quickly you can remove a condition. Speaking to an insurance agent is also highly recommended in the pre-search process!

Step #3 - Assemble your team. There is a very strong chance that you have a few trusted advisors in your pocket. Whether they are your family, friends, or even your colleagues at work, advise them that you are going to be looking at homes. If they have purchased a home themselves they may have valuable tips to watch out for, and if any of your advisors are in a professional service, such as a lawyer, or accountant, it is good to verse yourself both on the costs, taxes, and legal implications of your home (ie duplex vs single family etc etc). If you have advisors in the trades, let them know you are looking, and they can often provide extremely valuable insight should you and your REALTOR come across something in a home that raises questions (ie plumbing, electrical, etc etc). If you believe you need another advisor, ask your REALTOR, they deal with homes on a daily basis, and will have trusted parties in almost every field.

Step #4 - Find the home. So you now have your team in place, and you have located a home for sale with your REALTOR. Now let’s book the tour! During a home tour it is crucial to take your time and have a very close look at the home you are considering to purchase. Look past the furnishings, and wall colours, and focus on the things that will be there on closing date. I can not stress this enough...but MAKE NOTES!! During the home tour experience, especially on a multi home tour, you may lose track of which house was which, so diligent notes may be your saving grace if you choose to submit an offer in a multiple offer situation. If you have questions during the tours, ask your REALTOR, and don’t be afraid to ask your advisors, or make sure you have a condition for a home inspection that you can revisit with your advisors and/or a home inspector after your offer has been accepted! Keep in mind during this step to make sure that you are comfortable with the home you want to submit an offer in. No matter what the market is doing, no matter how hard people are pushing you, do not move faster then you are comfortable!

Step #5 - Offer time! So now you have found the home, and you are ready to submit an offer. Remember all the prep work we did in the previous steps? This is where it pays offs. The trick to a negotiation is for a deal to hit the fewest snags possible, especially in competition. Now I am not saying that you should ever (like ever, ever) go into an offer with no conditions if you are not 100% comfortable. I personally believe that you should do all of your homework, before fully agreeing to buy a home. So let’s go over the top 2 conditions that we see on a daily basis and see how by working smarter we are increasing our chances.

#1 - Financing - Without a doubt this is the most seen condition on any offer, ever. But by doing our homework and keeping the communication lines open with you bank or mortage advisor, we may be able to knock down your conditional time to less the 5 business days (average is 10), or even remove the condition all together. This is also single handedly the biggest scare for a seller...if you can’t get your money, they put the home back on the market, and may have lost valuable selling time.

#2 - Home Inspection - So now you have the money, but is the house worth the money, or are we buying a money pit. This is where your team comes in. There is no rule as to who you can bring on your showings. I once had a customer who brought an inspector with her through every single home we toured. Obviously that being on the extreme end, it is good to have professionals in the trades view a home with you. The first reason being is that they are looking through a different set of eyes at a home then you are. They deal with renovations, and surprises every day, and can often spot the symptoms well before you crack open a wall, or pull up a floor. Their insight is both invaluable and valuable, as sometimes they can spot problems well in advance. The number two reason is because they can often spot a problem that can tell you to walk from an offer, or help you to use those problems in a negotiation to garnish you a better price! Again invaluable & valuable.

So as you can see by simply preparing yourself, and doing your education in advance, a cleaner offer can garnish you both a better price, or help you win the home in a multi offer situation! Just remember, it pays to work smarter, and as Zig Ziglar said “Success occurs when opportunity meets preparation”.

Chat soon