In the market for a home right now? My condolences. Kidding (mostly). Only a few months ago, I was in the same boat. It’s frustrating to see how expensive everything has become, and how few homes are available for sale, especially at lower price points. More than ever, buyers need to be prepared, pragmatic, and determine.
Really know your budget
It’s one thing to ogle homes for sale on Centris, but don’t pick up the phone to book a showing unless you have a pre-approval mortgage in hand and you are confident that the home is one you can truly afford.
“It’s not just your mortgage payment, your down payment and your welcome tax. I see a lot of young couples, just going to the absolute max. You don’t want to end up house poor,” West Island Royal Lepage Elite broker Sean Broady said.
Plus, with so few homes for sale, multiple offers have become common. According to Hudson M Immobilier broker Dylan White, if there’s no letter of mortgage pre-approval for the buyer, even the plummiest offer is likely to end up on at the bottom of the pile.
“The best thing a buyer can do right now in this market is to get pre-approved (for a mortgage),” White said. “Don’t even start looking until you have a pre-approval.”
One note of caution: online pre-approvals may be quick and easy, but Broady said he strongly recommends his clients go through the extra steps to get a firm pre-approval. While it may seem like a hassle to dig up your proof of employment, notice of assessments, and go through the credit check, you (and the seller) will have much more confidence that the financing approval will come through as expected.
Once you have that pre-approval in hand, be extra cautious with your credit, Broady said. Don’t lease a car or change jobs until after your name is on the deed of your new home.
Remember that the highest bid doesn’t always win
Although many properties today do attract more than one offer, don’t assume you must bid significantly more than asking. A cash offer or one with a solid pre-approval may beat out one with shakeer terms. Flexibility on possession dates or other terms can also make a difference, White said. A heartfelt letter expressing how much you love the home can also sometimes tip the scales in your favour.
If a property has been on the market for a month or more, there may even be room to negotiate. “The likelihood of a multiple offer will go down with every week that it hasn’t sold,” White noted.
Sometimes listings go stale because the house has something wrong with it, but that’s not always the case. Maybe the initial asking price was too high, or the house may have had an accepted offer that fell through due to financing or another reason.
“There are deals to be had in every market. You just got to have the right timing and the right approach,” Broady said. “I always tell my buyers, ‘What do you have to lose by putting in an offer? What’s the worst that can happen? They say no. And we move on.”’”
Be open to compromise
If you’ve been looking for a while and you’re not seeing the house you want within your price range, you may need to decide whether to expand your search to some different areas, consider a smaller home or condo, look at fixer- uppers, or even make a plan to move in with family or find a place with an income suite.
“You’re never going to find the perfect house. So you’ve got to be willing to make compromises, particularly in this market,” Broady said.
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