Looks like Vancouver’s red-hot housing market is cooling and Toronto could be next, thanks to government policies aimed at addressing affordability. With that said, demand is still high in these markets, as evidenced by record-low inventory.
Meanwhile, other housing markets are seeing a boost in real estate activity. “Sales are up in Calgary and Edmonton from last year’s lows, and trending higher in Ottawa and Montreal,” said Andrew Peck, president of the Canadian Real Estate Association, in his latest monthly report.
What does that mean for the prospective homebuyer? Demand increases, price increases, competition increases.
If you’re in the market to buy a home, here are some tips to help you win the war – the bidding war.
It’s time for a reality check
Keep a level head when making an offer, and don’t let your emotions get the best of you. Multiple offers may be rolling in on your dream home, but don’t become a bidding war casualty. A home is only worth so much, and it’s up to you to decide what that magic number will be. Set your budget and more importantly, stick to it!
Pre-approval peace of mind
Nothing tops the sting of finding your dream home after a lengthy and exhaustive search, only to learn that it’s not actually in your price range. Ouch!
A mortgage pre-approval gives you the freedom to shop for your home, knowing that:
- your lender has agreed to the sum;
- you can actually afford the mortgage payments; and
- you’ll lock-in your low mortgage rate for up to 90 days, without the worry of rate increases weighing you down while you shop.
If you do find yourself in a multiple-offer scenario, you’ll know exactly how much you can bid without breaking the bank. Then, make your best offer, and keep your fingers (and toes!) crossed.
Line up your soldiers
An experienced real estate agent, financial adviser and lawyer will guide you across the potential mine-field that is the housing market. These professionals will help you keep your emotions in check, and make a wise purchasing decision based on facts and figures, not feelings. Remember that a home is an emotional purchase, but it’s also one to be made with your head, not your heart. This team of experts will guide you with an unbiased eye.
Compare and conquer
Once you have a budget and a team of professionals, you can hit the streets. Compare homes to others that sold in the same area. Your realtor has access to the Multiple Listing Service (MLS), giving you information like sales volumes, average price and days on market, both by housing type and neighbourhood. You can then make an offer that you’re comfortable with, based on real market data.
Make a smart bid that reflects what the home is worth and what you can comfortably afford, even when interest rates rise by one, two, three per cent or more.
Winning the housing market game can be viewed in a number of ways. To some, winning means getting the home they love – at any cost.
To the smart buyers out there, winning means knowing the difference between good value and over-value, and making a sound purchasing decision that you can live with for years to come.