Everyone is looking for a deal, but how do we know when we have found one?

In most cases, you won't realize how great a deal you have found until after you have made your purchase and the market goes up. That being said there are some clues to help you search out a good deal.

3 ways to find a deal

1. Look for days on the market. The longer the home has been on the market the more likely you are to get a deal.

2. Homes that don't show well online. Bad photos can cause people to skip over a listing making it less competitive in the market allowing you to score a deal.

3. Look for homes that need some work. Many buyers want move-in ready homes and if you're not afraid to put in a little elbow grease you may be able to find a great deal.

Even if you find a property that fulfills your needs and meets all 3 of the above criteria you still won’t know you got a deal until the dust settles and the market goes up.

What about price reductions?

Yes, a price reduction can indicate a seller is more motivated but not always. Often a price reduction is because the seller has realized the property is priced above market value and needs to come down to reflect what the market value is. 

Keep in mind: Price is a marketing strategy and sometimes homes can be priced intentionally above or often below market value. Price changes can reflect a change in a sellers marketing strategy and an attempt to get the right offer on their home.

The Bottom Line

The bottom line is this. Real Estate has been and continues to be a solid investment. Consider this, there was a market correction in 2017 and if you made a purchase in April 2017, by September that year you may have been thinking you made a mistake. Yet, within 3 years your investment was growing again and today you’ve easily made $200-$300k on your investment.

 Source: TRREB Home Price Index

Looking for answers?

We study homes and prices every day. Our family team will keep you informed and up to date on current market trends, allowing you to make informed decisions when buying and selling.  This is a partnership and our goal is to be with you every step of the way making the buying and selling process easy and enjoyable.

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 bstantonrealtor@gmail.com.

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