The ongoing pandemic has pushed many Canadians to re-evaluate their current housing situation. According to the Canadian Housing Market Outlook (2021) Report, 40% of Canadians felt their homes needed upgrades, and 29% thought they needed to up-size and want bigger space. It has resulted in a housing supply shortage, which is likely to continue in 2021 and putting upward pressure on prices expected to rise by 4 to 6 percent.
Currently, with the real estate market being as hot as it is, it isn’t a surprise that almost every home sale ends in a bidding war. According to RBC’s housing market report, the active home listings in late 2020 were significantly lower than the 10-year average in Ontario, Quebec, most of Atlantic Canada and BC. What does this mean? There are multiple offers placed on the same property, and the prospective buyers are increasing their bids to secure homeownership.
Except for condominiums, buyers will continue to enter bidding wars, thanks to the limited choice of homes on the market. If you are not prepared well for the homebuying journey, you may face frequent disappointment while house hunting.
Here are few tips to avoid bidding wars and successfully buy a home without spending over your budget.
You can work with an experienced realtor who can guide you through the homebuying process. They understand the market trends and provide honest advice while purchasing a home.
The next tip is to understand what is a listing price. It is an asking price for the property that is negotiable. Homebuyers tend to forget that the listing price is not the final selling price of the home.
A realtor will help you to evaluate the value of the home would be and can look at comparables. In today’s market, it is common to list the house well below the property’s value to attract large interest, which fuels a bidding war. A great tip is to go over the comparables with your realtor and check the selling price of other homes in the same neighbourhood.
“How much are you pre-approved for?” Most of the homebuyers would come across this question when you show your interest in a listing. A preapproval helps you understand your affordability, analyze your financial information, and get pre-approved for a specific mortgage amount and interest rate. Also, if you want to set yourself apart from other homebuyers – get pre-approved. You will be a “serious buyer” for the real estate agent and the seller rather than a homebuyer who is just “looking”.
You submit all the vital information required for the preapproval in advance, and that saves you time. You can use your time efficiently to view homes at your own pace and prevent any overwhelming situations along the way. You can also prevent any last-minute surprises such as errors on the credit report that may delay the home buying process.
If you are well prepared and with the help of knowledgeable real estate and mortgage professionals, you can surely buy the perfect dream house.
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If you’re ready to get started with your mortgage process, feel free to reach out to us for any questions related to home buying. We can help you to get all your mortgage related queries answered. You can reach us at 905.997.7001 or email us at email@example.com to begin your home buying journey.