By RE/MAX Canada and Barry Nestransky
The majority of Canadian housing markets, including Canmore, are expected to sit in seller’s market territory through 2022. This is great news if you already own a home and are considering selling it. On the other hand, those who have their sights set on buying a home this year will have to prepare accordingly.
What is a Seller’s Market?
In a seller’s market, there are more buyers than there are homes for sale resulting in fewer listings to choose from and more competition. Homes typically sell quickly and often homes see multiple offers, bidding wars, and sell for over asking price. In a seller’s market, the seller has the upper hand. This is not the time to submit a lowball offer.
So how do you buy a home in a seller’s market? Here’s everything you need to know.
Work With a Pro
Working with a local, knowledgeable, and experienced agent can ease much of the stress associated with finding and buying a home in a seller’s market. Advantages of working with a skilled, local agent include:
- access to all the homes in the local market.
- access to realtor network and connections.
- knowledge of neighbourhoods and market conditions.
- negotiating skills.
- handle the paperwork.
- guidance and support in the biggest buying decision of your life.
Inform Yourself
Know market conditions. Real estate is very local, so what is happening in one town, city, or province may not be the case in another. Therefore it’s important that a professional, experienced, and knowledgeable real estate agent educates you on the local market.
Know Your Budget
Get pre-approved for a mortgage. This gives you an idea of how much a lender is willing to finance and how much you can spend. A pre-approval also locks in the current interest rate for up to 120 days. This will insulate you from rate hikes in the near future. If the rate drops, your lender should honour the new lower mortgage rate when you’re ready to make your purchase.
Prepare to Act Fast
If you’re hoping to buy a home in a seller’s market, you’ll need to take quick and decisive action when you find a property that interests you. This is where all your prep work will pay off.
Make a Strong Offer
In a seller’s market, you may only get one chance – and it’s not always about the money. With all other things being equal between your offer and another, one that’s tailored to the seller’s needs can tip the scales in your favour. Aside from conceding to the seller’s wishes, an offer in a seller’s market should have as few conditions as possible.
A conditional offer means that certain terms must be met in order for the offer to be valid. Some common conditions include financing, home inspection, and lawyer review.
Offer conditions aren’t ideal for the seller, as each one has a potential domino effect. You may wish to remove the financing or home inspection condition in an effort to beat the competition.
Prepare to Pivot
Prepare to jump on an opportunity sooner than expected. Understand that turning down a particular property may be the right decision. Whatever the pivot may be, the right real estate agent will assist you in formulating and adapting a plan to help you purchase well in a seller’s market.