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Home Ownership

Tips for Homebuyers in a Sellers Market

Clock5 min. read
byVexxit Staff onJune 21, 2021

You might have noticed fewer “For Sale” signs in your neighbourhood lately, and it’s not a coincidence. New listings are down in most local markets, while home sales — and the average price of those sales — are way up. There’s no doubt it’s a seller’s market, so where does that leave buyers? We’ve got you, with these tips to get you into your next home ASAP.

You might have noticed fewer “For Sale” signs in your neighbourhood lately, and it’s not a coincidence. A recent report by the Canadian Real Estate Association shows that new listings are down in most local markets, while home sales—and the average price of those sales—are way up. 

It’s a classic case of supply and demand. The pandemic has driven many to think hard about the place they call home—after all, we’ve never spent more time there. Would-be sellers may be having second thoughts about leaving the comfort of their homes or hesitant to invite buyers in. Would-be buyers are looking for their ideal space, maybe with a yard or more room to accommodate working from home. They’re also enjoying record low interest rates. 

There’s no doubt it’s a seller’s market, so where does that leave buyers? We’ve got you, with these tips to get you into your next home ASAP.

1. Get your financial ducks in order

In a seller’s market, buyers have to be prepared to move quickly when they find a home they want to bid on. With a mortgage pre-approval in place, you’ll know the price range you can shop within and you won’t risk losing a home you love over a financing issue. 

If you have a down payment but can’t seem to secure financing for the rest of your purchase, you might have to look at your debt load. Student loans, car loans, credit card debt—it adds up, and it increases your debt-to-income ratio, making it tough for you to get the financing you need. Reducing your debt will increase your chances of getting a mortgage and getting a good rate.

2. Stick to the mid-range of your budget

Shopping under budget is wise in this market, as low availability of homes leads to competition and competition leads to bidding wars. 

There’s also the danger of having a home appraised at less than it sells for, which is a real possibility with competition driving up housing prices. Banks usually only lend up to 80% of a home’s appraised value, so you may not even get what you’ve been approved for if the home’s appraised value comes in at less than the selling price.

3. Play it safe with your down payment

It’s tempting to want to grow that large chunk of money you’ve saved for a down payment in an investment, though that comes with financial risk. What happens if you find a home you love but your fluctuating investments have left you with a lower down payment than you started with? You’re better off playing it safe with a short-term GIC or a high-interest savings account, so you can keep earning and easily access your money when you need it. 

4. Put yourself in a position to negotiate

Negotiating can seem scary when you really want that home you have your eye on, especially if other potential buyers are showing interest. The final decision lies with the seller, so coming in with a strong offer may give you more room to negotiate. This is where bidding in the mid-range of your budget and without financial conditions comes in handy. The seller may be more willing to leave behind that furniture you love or offer flexibility on your move-in date if you can make the offer appealing to them.

5. Don’t give up

Whether your mortgage application is denied or you lose your dream home to another buyer, you could face some disappointment as you embark on this home-buying journey. It’s no fun, but it happens. 

Rethinking your wish list could take you to a gem of a home you would have previously overlooked. Coming up with a financial plan could open you up to new financial possibilities. Keep at it, and with all leaning in your favour you’ll soon end up a proud homeowner. 

6. Call on the experts

There are times when you want an expert in your corner, and the homebuying process is one of them. Buying a home is possibly one of the biggest financial investments you’ll make in your life and you want to do it right, from knowing what you can comfortably afford to saving for a down payment to setting yourself up to get the best mortgage rate. You can find a financial advisor whose skills are a match for your needs at vexxit.com, helping you get ahead as a buyer in a seller’s world.

Get Help Buying A House

Using a financial advisor and lawyer as resources in your home buying process can ensure things go as smoothly as possible.

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