Canada is currently experiencing a seller’s market. Record-high demand coupled with record-low supply has caused house prices to soar. The national average price of a single-family home hit a record $621,525 in January, up 22.8%, from the same month last year, CBC reports. A seller’s market is undoubtedly tough to navigate. By employing smart and effective strategies, you can make yourself a more competitive buyer.
Re-assess your options
If you’re continually making offers only to keep getting outbid, it may be time to reconsider the type of home you're looking at. For example, start looking at smaller, less-flashy homes or in cheaper locations farther out. However, you can also take another look at your mortgage application to find ways to potentially increase your budget. A mortgage calculator can calculate your payments based on the loan amount, interest rate, and term. If your debt-to-income ratio is too high, this can prevent you from qualifying for a mortgage. By working on decreasing your debt-to-income ratio, and even paying off debt with funds saved for your down payment, you’ll increase your borrowing capacity and qualify.
Make a bully offer
Speed is everything in a seller’s market. When a home goes up for sale, you need to make a real effort to see it as soon as possible. If you can’t fit an in-person viewing into your schedule, ask if your agent does virtual viewings. Most properties will have pre-emptive offers before their offer dates. In fact, making this type of “bully” offer will drastically up your chance of success: a good bully offer is attractive to sellers who may not want to risk waiting for other offers to come in, only for them not to be as high as yours. It also helps you potentially bypass the competition.
Make it unconditional
A seller’s market is highly competitive. In order for your offer to stand out against numerous other buyers, your offer must be unconditional. Sellers generally don’t want to select conditional offers that depend on the buyer securing financing or performing a home inspection — which potentially risks the sale going through. To make an unconditional offer, you’ll need pre-approved financing, and a home inspection must be carried out as quickly as possible beforehand.
Expensive and competitive, buying in a seller’s market can be challenging. However, by remaining optimistic and persistent, your efforts will pay off, and you’ll successfully secure your new home.