Five Tips For Buyers In A Hot Sellers’ Market

If you are buyer looking to purchase a house in Toronto, you know that the market has become extremely competitive over the last several months. Bidding wars and bully offers are rampant, the inventory of homes for sale is near an all-time low, and it’s common for buyers to lose out several times in competition before finally getting an offer accepted.

Here are some tips that can increase your chances of getting the home you love… and can afford.

Figure out exactly what you want. Get crystal clear on the type of home you’re looking for, including size, location, old vs new, number of bedrooms, garage, parking and so on. This will help narrow your focus on listings that are a good fit for you.

Get your financing pre-approved. In a competitive market, getting your financing pre-approved will give you an advantage at offer time, as it will reduce the risk of making an offer without a financing condition. Don’t leave this to the last minute, do this now.

Be prepared to act fast. When the market is hot, good listings don’t last long. You don’t want to miss out! When you see a listing you like, review everything available online first, then schedule a viewing right away if you think it could be ‘the one’. Even if the listing says that offers will be reviewed in a week, don’t wait, because there could be a bully offer long before the offer date!

Determine your ‘no regrets’ price. Great homes in a sellers’ market will typically receive multiple offers and sell well above the asking price. For each home you are interested in you need to know, first of all, what the ‘fair market value’ is; and then you need to decide the highest price that you are willing to pay for it. Be aware that the fair market value is very often higher than the asking price, sometimes much higher; and also be aware that great homes often sell above even the fair market value. Your ‘no regrets’ price needs to be one that you can live with whether you win or lose the bidding war. Once you’ve determined that price, then stick to it — don’t allow emotion and competitive urges to tempt you to bid more than you are truly comfortable with. And don’t forget to run your price by your lender before the offer date, especially if you are planning to make an unconditional offer.

Consider writing a letter or even doing a video telling the sellers how much you love their house. Homeowners are very attached to their homes. They take great pride in every room, every upgrade and feature, and they want their home to go to someone who will love it as much as they do. If your bid is in close competition with one or more other bids, a heart-felt letter or video can make the difference between winning and losing.

 

It’s definitely not fun to be a buyer in a hot sellers’ market, but patience, persistence, and a disciplined approach will get you the house you want at a price you can afford!