The turbulent economic and political news in Canada may not fill everyone with excitement when it comes to buying and selling real estate – yet, where uncertainty lurks there is opportunity!
The latest data on Canadian real estate suggests prices are now subdued due to the obvious themes of public discourse. People are concerned about the economy, the upcoming election and what’s transpiring south of our border.
For those buyers confident of their personal circumstances, this is a great time to find the next home of your dreams. And given that it’s spring selling season, you’re timing could not be better.
Canada has almost 150,000 properties on the market currently, according to the Canadian Real Estate Association (CREA). While it’s around 25,000 below the historic average, there’s still plenty of choice.
Given that interest rates have fallen from 5% to 2.75% since last June, your spending power has increased considerably.
While sellers are keen to make a deal, most are sufficiently comfortable that they’re not desperate. So, as a buyer, you need to assess the value of a home before making an offer.
In most situations, low-balling your bid is not going to do you any favours. Sellers tend to react badly to such approaches. Generally, they send the low-balling bidder to the back of the queue.
So, what is the best way to bid for a house or apartment? Below, we’ve outlined an ideal approach. And if we can help you with your real estate needs, please contact one of our agents.
Get pre-approval: You should have a pre-approved mortgage from your chosen lender before making any offer. This agreement will ensure that you focus on the properties you can afford, and you stay within budget.
Value equation: Study comparable sales in the area to determine a competitive and realistic price. Leave yourself some fiscal headroom so you can increase your offer if required.
Conditional offer: In this market, you are in a good position to put conditions on your offer. For example, you can say it’s contingent on the lender confirming your mortgage. Another essential condition is the property has an acceptable building inspection report. Work with your real estate lawyer to lay down all the necessary contingencies in your offer.
In writing: It is always best to make your offer in writing. Why? Because there should be no confusion over the bid and the conditions you have put with it. It avoids a “he said, she said” argument.
Negotiation challenge: If you come under your seller’s price, expect to negotiate. Leverage the knowledge you’ve gained from your market research to justify your numbers. Also, you should recognise if the seller is asking a price beyond current market value.
Deal coverage: Work with the seller’s agent to understand what the deal covers in terms of fixtures. For example, which appliance will the seller leave behind? You might want to keep the curtains or blinds that have been designed specifically for the windows.
Set a timeframe: Don’t let the seller sit on your offer. Apply a little time pressure. Perhaps ask for a response within 72 hours or it expires.
Settlement period: Work with the seller to find a mutually convenient settlement period. Ideally, it will be between four to six weeks. Your real estate lawyer must ensure the contract reflects the agreement.
Contract details: Always read the contract thoroughly. Your lawyer will do this, too. But if there are any areas you’re unsure about or do not understand, it’s important to raise those issues.