BUYING IN A SELLER’S MARKET
4 Tips to creating a successful buying strategy with The Home Guyz Team at Solid Rock Realty
2020 was a busy year for Real Estate and home sellers found themselves with the upper-hand. 2021 is shaping up to be no different and is quickly proving itself to be another highly competitive year for property sales. With demand outstripping supply, pushing prices to rise, it’s a difficult and exhausting climate to navigate as a buyer It can feel overwhelming. There is no need to be discouraged. The Home Guyz have experience and tips to build your strategy that will steer you through the process. While you may not nail-it on your very next bidding war, you'll certainly be more prepared for the cut-throat market and set up for success to secure the home of your dreams in the long run.
1) Be Prepared Financially.
You must have your pre approval ready, it’s an automatic deal-breaker. Being prepared with your pre approval paperwork and your deposit (bring a certified cheque) shows the seller that you’re a serious buyer. Remember that if you offer is accepted and you choose to back out you will lose your deposit, so always make sure that you’re serious and ready to move forward. The seller needs to know that you’re committed and motivated to close the deal quickly and have all funds and paperwork ready to go is the best way of showing you’re committed.
By looking at properties that are selling 10k lower than your top price (the price you are pre- approved for) this allows you some wiggle room at negotiation time, if you want to be able to up your offer in negotiations. It will also ensure that you keep your mortgage payments within a comfortable budget.
If you plan to sell your home in order to buy, you need to ensure that you have placed your home on the market first. The seller is motivated to get a buyer and any hesitation on your part can make or break the deal. The seller is looking for a smooth transition, and any hesitation on your part equals a delay or uncertainty for them, so get your home on the market in order to maintain the domino effect.
2) Know What You Want, and Where You Can Compromise
The more you know about what you're looking for, the easier it is to make a compromise. Are you looking for a newer home? Then perhaps you can consider removing the home inspection in order to give less contingencies in a bidding war.
If you know that 2 parking spaces is a must, then ensure you’re only looking for that and not getting caught up and invested in a property that doesn’t have what you need. Maybe you can consider fewer bedrooms or perhaps moving a little farther out. In a sellers market, price is rarely something you can trade-off, so you need to take a look at the areas you are willing to negotiate on, and what are non-negotiables for you. This helps you and your agent narrow down to properties that you’re more likely to succeed with both in a bidding war, as well as your happiness with the property. The more you know what you want, the easier it is for you and your agent to build your strategy.
It can be a very emotional process, and often it’s easy to get caught up in the speed in which the process moves. In this competitive market, you will see buyers removing and negotiating the contingencies in their offers in order to be competitive. you don’t want to be making compromises and big decisions in the heat of the moment when emotions are high and bids are on the table. Make sure you know your comfort level and where you’re willing to compromise before moving forward into the eye of the storm.
3) Be Ready to Act Fast.
Houses today and not on the market for long, they wait for nobody. So be prepared to act fast.This means, you may have to arrange your schedule to allow for viewings (virtually if needed), gather all the info beforehand and make sure you find the time to review all the details before the viewing. Make sure you do this all quickly, failing to review and view as soon as possible can result in a lost opportunity. The seller will always favor someone who is ready to move quickly. This ties into the last point of knowing what you want, this is no time for hesitation.
4) Work with an Experienced Agent Who Knows The Area
Knowledge is power! The Home Guyz can tell you what similar properties are selling for in the area. It’s important to always work with an agent who knows the community and market well and can let you know what areas and features your money can buy. This in-depth knowledge of the area, and how the market has been operating will allow you to bid smart, aggressively and with confidence.
If it comes time to re-evaluate your options, then an experienced agent can always give you the next-best option for you (which in our experience always turns out as the better option- it always works out for the best in the end!)
Working with an agent also helps keep you in check, a good agent will steer you away from a home or area that won’t be beneficial, or help keep your contingencies in check when your emotions take over. They won’t allow you to buy out of your comfort zone or into an area with a poor school district.
Buying a home in a seller’s market can be fierce, but it isn’t impossible and don’t be discouraged. While it will feel overwhelming, being prepared is the best way to ensure that you feel confident with the process. Be prepared: financially, with your strategy, and with knowledge and you’ll feel confident and ready to make all the right moves to secure your next home. And of course, The Home Guyz would be happy to help you every step of the way!