Are you ready to buy a home? Are you a first time buyer?
If you checked yes to the above questions this blog is for you. It’s also to remind you that we’re not here to discourage you from house hunting we simply want to help you succeed by pointing out certain overblown expectations we see consistently in the current market situation.
THE CURRENT HOUSING MARKET IS A SELLERS MARKET. FOR A FEW REASONS:
- Inventory is low
- Interest rates are at rock bottom
- Buyers are capitalizing on taking as much money as they can
- COVID has made people want more space
Due to the current climate – there are a few things we need to talk about to make sure you know what you are getting into when you purchase your first home.
1) YOUR FIRST HOME WILL NOT BE YOUR “DREAM HOME”
Typically, when you buy your first home, it is in the range of $200-300K (or a little more or a little less. All depending on your income, deposit, etc). So, when you are looking for your home please keep an open mind. You might have to commute. You may have to redo a kitchen, bathroom, living, etc.
Your willingness to make a few adjustments and compromise will go far in this market.
2. YOU NEED TO SECURE YOUR MORTGAGE
House hunting can be fun! It can become stressful in these markets! Having your ducks in a row BEFORE you start looking for a house is going to be your best option.
This is also crucial incase you find a home you want and want to make an offer. You need to know you can afford to get the house you want. Because interest rates are so low right now, even cash buyers should be pre-qualified.
3. OFFERING THE ASKING PRICE
Asking prices are tricky! Bidding wars over the past few years resulted in a reverse pricing strategy. This can be frustrating for everyone involved in the buying process, clients and realtors alike.
Sellers and the agents selling are currently doing the low pricing strategy in order to drive up bidding wars. In some markets, this bidding pushes up prices higher than assessed value.
Word of advice – if you find a home that is beautiful, is in a fantastic location and seems way too good to be true, chances are it is too good be true. You could find yourself in that bidding war we discussed above!
4. ASKING FOR EVERYTHING TO BE FIXED / REPLACED
Usually a seller will fix some glaring problems. USUALLY! In a seller’s market—which is all of Canada right now—not so much! Sellers have backup offers and buyers willing to waive the inspection altogether. They won’t have to take your offer if you are asking for a lot of changes.
So be realistic when you make your offers.
Inspections are meant to shed light on any and all maintenance issues and real or potential defects, many of the smaller “flags” will likely be forgotten once you move in.
Expecting a seller in a competitive sellers market to address any and all changes could cost you the house!
As always if you need help buying or selling a home do not hesitate to contact Gregg Bamford or Ryan Bamford.