How to Buy in a Seller’s Market
How to BUY a home in a Seller’s Market
Ottawa Real Estate is considered a seller’s market right now. How can you be a successful BUYER in today’s real estate Market? In the above three and half minute video Dan discusses a proven approach on how to BUY a great home with reasonable price and terms in a seller’s market.
Understand the Situation
When there are more buyers than sellers, and the buyers are motivated, it is considered a seller’s market (see What is a Seller’s Market). To be a buyer is to be the underdog. There will be opportunities if you watch carefully. This could mean careful consideration of your options, priorities and current supply of homes.
It is always important to arrange financing before beginning house hunting, but it is essential in this competitive market. If you’re planning to pay cash, you’re good to go! For most buyers, it’s best to begin with your regular bank. Another option is a mortgage broker. Do not go to each and every bank you can think of…it’s a waste of everyone’s time and will damage your credit rating. One bank and then a mortgage broker to make sure you are getting the best rate and terms possible for your mortgage. Once you have what’s called a “pre-approval” find out from your banking contact what they will need to confirm financing on a home and how long it will take to do so.
If your banker tells you that they will need five business days to confirm financing in all situations then your are talking to the wrong bank or the wrong person at the bank. Tell this “slow” banker that you will be NOT successful in the purchase of a home if they need this long. See what they say and possibly talk with another mortgage professional. Five business days is reasonable under balanced or buyer’s market conditions.
Your banker/mortgage professional may say you are approved to a certain price point. You need to reconfirm the amount and get it in writing! Find out what the conditions are for the pre-approval. Minimally the bank will require pay slips and two years of your tax return if they don’t have this already. Much of the time the bank will also require an appraisal. See Blog post on Appraisals — coming soon! Again, you need to know how quickly your bank can confirm your financing on a specific home.
Real Estate Education
Next is learning about real estate. Look at different types of homes in various locations. If you are new to Ottawa, talk to colleagues or friends that have lived here a long time. For some people, location is always more important than the kitchen and baths…for others it’s all about the home — the nest. Understand what’s best for you and then visit homes with your Realtor(r). If you have a great Realtor(r) (Testimonials) he will help with the education, help with the decision making and earn your trust.
The best home for you may be on the market today, or it may be 3 months from now. Continue the education process and pay attention to the sale prices and selling environment that are occurring in the homes you are considering over time. You may have to make offers on multiple homes before being a successful buyer. Be patient. There is often more than one great home for each buyer.
Ready for Action
Don’t wait to visit homes. Get to any newly listed homes as soon as possible — first or second day if possible. Once you find a great home that satisfies your requirements, you need to make an offer — do not hesitate. Some buyers know as soon as they walk in the front door of the right home. For others, the decision takes some contemplation or a checklist. Once you decide, don’t wait. Move ahead with the process.
What is the Offer Process?
In a real estate seller’s market most homes will have specified offer date/time — most often within 4 to 10 days of being listed. If this is the situation, make sure your Realtor(r) informs the listing brokerage of your interest and that he should be notified of any offers or updates to the process. You don’t want to find out after the fact that the seller moved ahead the offer date or time and the home is already sold. This can happen when an aggressive buyer submits a very strong bully offer (blog post coming soon) in order to bypass the competition. In theory, anyone that has expressed interest in the property (visited or contacted listing agent) should be notified of the change in offer timing. In practice this occasionally gets missed.
Next is arranging inspection(s) and financing prior to making the offer so that you can come forward with the best offer possible. See video above.
If there is no specified date for the offers, then make your offer as soon as the decision is made.
So many more questions!
The advice I give in the video may not be exactly the same as I would give you in person. I would need to know your particular situation, requirements, wants and timing. I’m sure you will have many questions for me. No matter your situation though, I can help you get a great home.
I’m here to educate, inform and guide you through the buying, selling and real estate investment process. I guide you through the important real estate subtleties of today’s market.
Let me know if you have any questions.
Also, be sure to sign up for my newsletter.
Dan Moloughney, Broker of Record
Ottawa Urban Realty Inc.
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