Over the past few years, when it comes to real estate, home buyers have been in the driver's seat for the most part. They've had lots of homes to choose from and could take their time to find the perfect home that checked off all the items on their wish list. Sellers, meanwhile, often had to wait until the right buyer came along, while their listing languished or they were hit with low-ball, conditional offers.
That has all changed. With the dramatic drop in inventory of homes for sale, sellers are taking the wheel for the first time in over a decade. And that dramatically changes the way houses are being bought and sold.
For buyers especially, it's important to be patient and most of all, to be prepared. "I have a list of potential buyers who are waiting on that 'dream property' to become available, and when it does, they know they'll need to act quickly," says Mark Murakami of Royal LePage RCR Realty in Flesherton.
"The most recent property I listed on Lake Eugenia sold in one day to a gentleman who had been waiting patiently for two years. He was pre-qualified, knew the area, knew what price range made sense and was prepared to put in a solid offer as soon as a suitable property became available - and today he couldn't be happier with his new purchase."
Here's what both buyers and sellers need to know in order to navigate today's market successfully.
1. The housing market is cyclical and conditions can change quickly.
Yes, we're in a seller's market now, but that could change, says Murakami.
"Interest rates, employment, new construction and political changes are all factors that can cause the market to shift quickly," he warns, "so potential sellers should be prepared to act while the market is in their favour and the opportunity is good!"
2. Education and market awareness are key.
Hesitation can result in the loss of your dream property, so buyers need to be prepared. "Getting prequalified for a mortgage by a bank helps the buyer to know their budget and any obstacles that they may have to deal with," says Murakami.
Buyers also need to be familiar with market values and recent comparable sales in the area they're considering. "They need to be educated on the geography of the area, amenities and future development," notes Murakami. "As a buyer, you need to be in the best possible position to move confidently and quickly when you find a home that speaks to you."
There are definite advantages to dealing with a local realtor who lives and works in the area, knows the neighbourhood well and is aware of details such as municipal bylaws and zoning changes that non-residents could overlook.
3. Making your best offer is more important than ever.
In a seller's market, competing offers can occur more frequently and conditional offers are scrutinized more closely. As a buyer, this means putting your best offer on the table - not just in terms of dollar amount, but also conditions and size of deposit.
Limiting your purchasing conditions and increasing the deposit amount will help to make your offer as attractive as possible to sellers," advises Murakami.