It’s no secret that we are in a SELLER’S market across the GTA. Buyers are frustrated, unable to find properties and if they are lucky enough to find a property they like, most often they will have to fight to buy it in an offer bidding war.
Multiple offer situations are everywhere, it only takes one other offer registered to throw a buyer into completion. Lately there have been dozens and dozens of offers registering on one home.
In some market areas, you can’t even get in to view that HOT NEW LISTING that just showed up on the MLS.
I know right! that sounds crazy?
Showing appointments are hitting the hundreds, we only have so many hours in a day and as it is appointment times have been shortened to 15 minutes for most listings.
Even with these short windows there are hundreds of showing appointments being booked on specific properties in some markets.
Simply put Seller’s don’t think having another showing will change the outcome of the sale. They already know they have a hot property and will see the line up buyers competing on offer night to buy their property. So letting one or more extra buyers and realtors through just doesn’t even matter. They know they are already sold and most likely well over the asking price.
So as a buyer in this hot market what are you supposed to do?
- Firstly, if you know you are not going to win on offer night because you aren’t coming to the offer table with a strong offer - HOLD BACK DON’T OFFER What many buyers don’t realize is that when you offer knowing it’s a long shot you are actually driving the prices up. YES you are creating more competition, and someone in that buyer batch at the offer table will just end up paying more.
- Have a proper MORTGAGE APPROVAL in place. This is imperative especially in hot markets like this one. Don’t just have a casual chat with your banker, make sure you have everything they need in your file to make sure you are 100% approved and qualify for the mortgage loan. This allows includes having honest and real discussions with your mortgage specialist about your maximum limits especially when you are facing a multiple offer situation.
- Yes the APPRAISED VALUE MATTERS. If you decide to be a loose cannon at the offer table and take the attitude of the sky’s the limit and the bank doesn’t agree when the appraisal comes in guess what? You need to come up with the difference in order to close on the sale. So what happens if you don’t have the extra money and the bank won’t approve the loan based on the purchase price you just paid? There is a strong chance you won’t be able to close and you may have to forfeit your deposit. I know that sounds harsh but it’s the reality for buyers who haven’t done their homework and know their limits and values in the area.
- When you select an agent to work with you they are going to ask you to sign a BUYERS AGENCY AGREEMENT, this is normal if you want them to represent you. It’s a contract, it has terms and conditions and outlines an expiry date. Read over the documents before you sign them and especially pay attention to the expiry date. What happens if you are signed up for six months or longer and by month two you know you picked the wrong realtor to represent you based on the way the communication and relationship is heading? Read the line above - it is a contract and it has an expiry date. Yep your stuck unless the realtor and the real estate company will cancel the contract which isn’t guaranteed.
- Don’t fall in love with the house and call it home until it’s actually yours. Sure dream about what it will be like to be a home owner, imagine yourself in the kitchen and backyard with your family, but do not consider its yours until you have a firm and binding contract and bank mortgage approval in our hand. Too often buyers become so discouraged in this market because they see a home that they love and consider it theirs before they have had to go to war to win it in multiple offer negotiations. If you loved this one you will love another one!
- DON’T BUY ABOVE YOUR MEANS. Sure we all want to find the perfect home, but at what cost? So many buyers act on emotion before they really look at the lifestyle they want. Make sure you aren’t leaving yourself short and can no longer follow your lifestyle goals. Being house poor isn’t a fun way to live. If you do decide to compromise perhaps it should be in the home features department instead of dipping into your holiday fund or kids education fund. We can all live with one less bathroom or minus a garage or perhaps have a little longer commute to work. Make smart choices that are aligned with your long term goals. Getting into the market with a smaller more affordable property that won’t break your budget is what matters most.
If you would like to have a copy of my Smart Home Buyers Guide reach out anytime. I would be happy to provide you with valuable information about the buying process and realtor/buyer agency relationships that Im sure you will find helpful as you navigate the real estate market.