After a sleepy start, our real estate market is gaining traction quickly. The industry was a little quiet as 2018 kicked off… and still, multiple offers remained rampant with many properties in the London area selling quickly, over-asking, with multiple offers received. If this defines “sleepy” we should all be on our toes when our market kicks into gear in the weeks (days!?) to come! Despite rising interest rates and new lending rules for Buyers, I suspect that this year will trend much like last year did. Here’s why:
- London remains very affordable. Relative to other major cities in Canada, our housing prices are considerably lower which will continue to attract migrants who choose to relocate to our city.
- Increased pressure will be placed on entry level housing due to a combination of rising borrowing costs and lower preapprovals. This will especially apply to the condo market where pricing tends to be lower. Some reports have even deemed 2018 to be the ‘year of the condo’. This demand will drive competition and have a domino effect as Sellers in this price range move up.
- Our economy remains stable with Buyer confidence remaining high, continuing to propel spending and investing in real estate.
So: If you find yourself engaging in this marketplace, you may wish to consider how you can proceed successfully without feeling like you’re spinning your wheels uselessly. It is not uncommon to find frustrated Buyers who submit offer after offer only to be beat out by the competition. Consider these strategies to help you succeed in your endeavor to purchase a home:
- Chat with your lender to assess whether a smart possibility might be to remove your financing condition. Many offers are coming in clean (no conditions!) and although your lender cannot give you a firm guarantee regarding your approval before submitting an accepted offer, they can help you assess your risk regarding whether this would be a wise and safe decision. Nailing down a back-up plan as a precaution will also help to provide peace of mind in submitting an offer without this stipulation.
- A home inspection, although common place in offers historically (not to mention important!), is another condition that we often see waived in an offer presentation. Of course, it is diligent to ensure all is well with the structure and systems of a prospective property before committing to it. You may wish to do your homework before your offer is submitted in order to satisfy yourself of any concerns or issues, thereby allowing you to proceed without requiring this condition in your offer.
- Be prepared to pay more. Although everyone wants a ‘deal,’ our market isn’t providing many opportunities for this while Sellers continue to hold the upper hand in negotiating. Realign your thinking – the winner isn’t the one who scored the best price, it’s the one who won the bid. Obviously, reason must be used to ensure you are not being foolish in your decision making and for this, you can consult your trusted Realtor. Rather than nickel and diming, however, keep the big picture in mind and remember that values in our region continue to trend higher, still enabling you to earn a return on your investment over time, even if you are paying a bit higher than you hoped.
- Lower your budget. If you’re comfortable spending $400,000, you may want to shop for a home in a lower range in order to build in a margin to remain competitive with an over-asking bid. Without this room to offer more, you could find yourself beat out by others.
- Listen to your Realtor. You should have representation that you believe in and trust, and a Realtor who will guide you and inform you well. Your Realtor knows the marketplace, and knows what strategies to use in order to give you an edge in your negotiating. You should be working with a Realtor who will go above and beyond to help you be successful in an offer. A seasoned agent has tips and tricks to help give you that advantage. They know how to get the job done, and their relationships within the industry will offer additional traction as you work towards finding that ‘next place’ to call home.
I welcome your questions, and would be honoured to come alongside your journey to help you through your real estate endeavors. The task of purchasing or selling your real estate can be daunting, especially if you are not familiar with how to navigate the real estate industry. This is why consulting a professional will help you to provide a positive experience through an exciting decision to move! Give me a call to chat further – I look forward to hearing from you soon!