The housing market has remained hot and with a lack of inventory and new buyers entering the market every day, it's showing no signs of slowing down. It's with that in mind that we wanted to share these 4 keys to success when buying a home in a competitive market.
If you're considering buying a home right now here are 4 things you must do to have success.
1. Get properly Pre-qualified.
You've heard this a thousand times for a reason. Meet with your #mortgagebroker or bank and get properly prequalified so you can buy with confidence. Knowing what you can afford is critical with housing prices rising as they have over the past 2 years. Looking for an option? Try our friend Barry at completemortgages.ca.
2. Don't get caught in the trap of evaluating homes based on List Price.
These days List Price is every bit a marketing tool as social media is. In the Durham Region homes often sell for between 10-30% over the list price. This is why you need a qualified Realtor© to help you properly evaluate homes you're interested in.
This segues nicely to our next point.
3. Set your expectations
Set your expectations by evaluating what homes like the ones you're interested in have already sold for recently. Your Realtor© can help a lot here by providing a reliable list of previous sales and advising you on how to focus your search to get the best results. Sites like HouseSigma also provide sold prices. Just don't confuse their estimates for sold prices.
4. Understand the risks.
We never advise our clients to buy without conditions. Having the ability to add financing or inspections conditions can be invaluable when buying a resale home. At the same time, many if not most homes are selling firm in this market (meaning no conditions in a buyer's offer). This puts more pressure on you as the buyer to go in firm to be more competitive. You need to be comfortable with the risks if you choose to go that route. Speak to your Reator© and your lender before you make the decision to go in firm so you understand the risks involved and you can make an informed decision.
Bonus Tips - Deposits are key
5. Increase your deposit
These days with so many buyers competing for homes a deposit that is 5% of the purchase price is fairly standard and in fact expected by most sellers. One way to stand out with a prospective seller is to increase your deposit beyond that 5%. Your deposit is collateral on the deal so having a larger deposit shows the seller you're committed to closing. That can make all the difference when a seller is evaluating close offers. Keep in mind if you can't close the transaction you could lose your deposit. Like we mentioned in point number 4, understanding the risks is critical.
6. Make your deposit Herewith
When you submit your offer you can include your deposit "Upon Acceptance" (delivered within 24 hours of acceptance) or "Herewith" (presented with your offer). Including your deposit with your offer can make your offer stand out and show the seller you're committed to closing the deal. That said if your offer is not accepted you just went to the effort and cost of getting a bank draft for nothing.
Have a question about buying in the current market? Connect with us by calling 905-434-2022 or email us at firstname.lastname@example.org.
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This month Brian connected with Barry Baboolal, Mortgage Broker & Owner of Dominion Lending to discuss the critical do's and don'ts when applying for a mortgage.
Watch the full in-depth interview.