How to keep your cool when you are a buyer in a hot market
When the pandemic introduced itself and made a permanent impact into our daily lives most of us thought that along with many other industries the housing market would come screeching to a halt, like an 18 wheeler with all its brakes seized, burning rubber and blowing smoke in its wake.
But that idea was short-lived to say the least. It seems that many of us decided to make the move to become home-owners, or upgrade/downgrade during these trying times.
Fast forward to the present market and it seems the market has not really cooled down over the last few months.
Bidding wars and waiving all conditions, and thereby any safety nets in an offer has become a common experience.
Pricing the property and then expecting hundreds of thousands more, is a seller’s dream. And for some of those sellers they get to experience the same process that their buyers likely went through when purchasing the seller’s property.
Some properties are even selling without a single in person viewing, these are mostly done through virtual viewing or online pictures of the property.
So, how can a buyer manage to remove as much risk as possible before placing an offer?
Well, it seems there are a few things one can do as a prospective buyer before deciding whether it is actually worth it to place an offer on a particular property.
- View the property in person: Instead of settling for staged professionally taken pictures from best angles and possibly edited by a photographer, view the property in person if possible. When you view a property in person you can take closer look at all corners of the rooms, feel the atmosphere and smell the home. That can speak volumes that you will not find by looking at a professionally taken photo.
- Understand your maximum budget and consider whether you have enough room to win the property in a multiple-bid war environment. This way you are not raising false expectations by wishing on a miracle to somehow win the offer.
- Discuss your future lifestyle and financial goals with your Mortgage Agent so they can help you select the right mortgage product.
- Before placing an offer on each property have your Mortgage Agent recalculate the numbers to give you the most affordability for that particular property.
- Consider the neighbourhood to see if your maximum offer price may reflect a reasonable value in the market because it is a good idea to consider the price point in the event the value of the neighbourhood does not appreciate at the present rate.
- Have the property inspected by a professional inspector to identify if there is anything that will need to be addressed in terms of repairs once you own the property.
- Consider your commute to work. Is it reasonable given traffic and weather? Many of us can work from home, which may be an advantage.
- Consider the neighborhood. Drive around the area, do you feel comfortable and safe? If you have kids or plan to, are there good schools, parks. You may be interested in the night life and restaurants. These are personal choices that are better experienced by personally driving around and maybe stopping in. It is very difficult to judge your feelings through pictures, videos and descriptions.
Hot markets create the F.O.L.O. (Fear of losing out) but we have to live with our decisions. It is always a good idea and step back to contemplate if this is where we want to live for the next 5, 10, 20 years. Losing a home by being out bid is terrible but winning the bid only to have to sell in a year and move again could be even worse. F.O.L.O. creates the urgency to just buy a house, but proper research and planning makes it easier to buy a home. Just a little food for thought in this buffet of choices.