February 17th, 2022 | Buying
How to Succeed as a Buyer in a Seller’s Market
It is no secret that the Toronto real estate market can be competitive. As a rule, conditions are in favour of sellers—and that is certainly true right now. Given the way the market currently looks, it is understandable if you are a buyer who is feeling discouraged. Fortunately, there are some steps you can take to help ensure your success.
Here are a few tips for securing the ideal home for the best possible price in a seller’s market…
Obtain mortgage pre-approval
If you require a mortgage to purchase a home (or you are opting for one because it will be financially beneficial), securing pre-approval is a must. During this process, a lender will determine how much financing you are likely to receive. While obtaining pre-approval is no guarantee that you will be fully approved, it can be very valuable—especially in situations where you need to put together the strongest offer possible.
In a seller’s market, buyers should do everything in their power to appeal to sellers. That includes having your pre-approval ready to go. The truth is, sellers want to know that the potential purchasers they are considering are both serious about buying and financially qualified to do so. Seeing a pre-approval letter can give them the reassurance you need.
When you are ready to buy, why not learn more purchasing real estate using the resources below?
- Is It Better to Buy First or Sell First?
- Are You Ready for a Major Real Estate Investment?
- Our Top 5 Central Toronto Neighbourhoods for Young Professionals
Make a strong offer early on
In some cases, it might make sense to leave some room in your offer for negotiations. However, this is not always the right course of action in a hot seller’s market. All too often, buyers find themselves in multiple-offer scenarios—in other words, their competition is stiff. Under these circumstances, sellers often negotiations altogether and opt for the highest offer they receive.
When you are taking all of the steps you can to compete, you may want to consider offering the highest dollar amount you can early on. Of course, the right strategy will depend on your circumstances, which is why it is so important to work with an experienced local agent.
Keep your offer clean
Home-buying conditions can protect you against worst-case scenarios. For example, let’s say your mortgage falls through. If you have a financing condition in place, you can walk away from the transaction without forfeiting your deposit or facing other consequences. While it is nice to have that protection in place, it can work against you in a seller’s market,
Simply put, sellers do not like conditions, since they can make a sale more complex. For this reason, it may be in your best interest to make a “clean” offer (one without conditions). Fortunately, if you decide to take this step, a skilled real estate professional can help you put other protections in place to reduce the risks involved.
Consider writing a letter
One thing that few buyers think of doing is writing a letter. Putting pen to paper can help you speak directly to sellers, connecting with them in a way you otherwise may not be able to. This is your opportunity to tell them why you want to live in their home (perhaps you have always dreamed of raising a family in the area) and even mention things you have in common (if you both have a passion for rescuing animals, for example, you may want to touch on that in a natural way).
Of course, writing a letter may not work, since most sellers are focused primarily on money. That said, when there are several high-quality, competing offers on the table, anything you can do to set yourself apart is worth a try.
Are you wondering whether our team is a good match for you? Learn more about working with us below.
Be prepared to take action
One thing is certain: if you want to compete as a home buyer, you have to act quickly when need be. That means being ready to enter into negotiations and make decisions on short notice, and planning the steps you will take in various circumstances. It also means ensuring that you have access to any funds you will need and checking in with your lender.
Working with a real estate team that has extensive experience and a strong track record can make all the difference in a competitive market. By educating you about the process and your options—and ensuring that you always know what is next—the right professional can help give you the advantage you deserve.
Ready to start the search for your next home? No matter the market, we can help. Simply get in touch to ask us anything.
