Have you heard that we’re in a seller’s market? It seems like Torontonians are almost always talking about real estate. More often than not, these discussions are about how hot the market is. Whether you’re on the buyer or seller’s side, understanding these conditions (and how they’re likely to impact you) is one of the keys to a successful outcome!
If you’re thinking of purchasing or selling a home in a seller’s market, here’s what you should know…
Defining a seller’s market
A seller’s market occurs when demand outstrips supply. In other words, there are more buyers on the hunt than properties listed for sale. As a rule, prices rise significantly under these circumstances—and homes tend to sell quickly.
When you hear anecdotes about heated bidding wars (the kind where properties generate 15 or 20 offers), it’s indicative of a seller’s market. Needless to say, these conditions are very common in Toronto.
Tips for buyers
There’s no getting around it: buying a home in a seller’s market can be stressful. The first step is ensuring that you’re mentally prepared. That means knowing how much you can afford. It’s all too easy to bid above your price ceiling in the heat of the moment.
You should also be aware that seller’s markets can move incredibly fast, which means you may need to take quick, decisive action. A skilled agent can help you understand what to expect—and advise you of your options.
Once you fall in love with a home, it’s time to make your offer as attractive as possible. That can be a major challenge—especially when there are other bids on the table. Here are just a few steps you can take:
Obtain pre-approval
Securing mortgage pre-approval sends sellers the message that you’re a serious buyer (which is especially crucial in a competitive situation). The process consists of having a lender look into how much financing you’ll likely receive.
Limit your conditions
Many buyers like to include conditions in their offer as a form of protection (in case they don’t obtain mortgage financing, for example). On the flip side, sellers prefer bids without them. For this reason, it may be worthwhile to forgo your conditions—so long as your agent can help you do so in the safest way possible.
Show some flexibility
Many sellers play it close to the vest. That said, your agent may be able to figure out how to make their lives easier. Doing things like being amenable to their preferred timeline can go a long way!
Work with the right agent
As a buyer in a seller’s market, your best bet is to work with an agent who has a proven track record. When you’re going through the interview process, feel free to ask each professional you talk to about their experience helping buyers in multiple-offer scenarios.
Tips for sellers
If you’re selling your home in a seller’s market, you’re in a good position. A boost in demand—and supply that can’t quite keep up—may mean a higher sale price. When you’re looking to make the most of these already favourable conditions, there are a few things you can do to achieve a great outcome.
Here are just a few steps you can take to maximize your return.
Don’t forgo staging
Many sellers assume they don’t have to prepare their home in a hot market. While making a successful sale will almost certainly be easier under these circumstances, having your property cleaned, decluttered, and staged will still give you a competitive advantage.
Focus on pricing strategy
No matter the economic conditions, it’s important to price your home strategically. One common way to do that when the market is hot is by pricing on the low side in the hopes of drumming up multiple offers. Your agent can help you settle on the figure that’s right for you.
Limit showings
Sellers often aim to show their property as often as possible to attract attention from many buyers. In contrast, restricting showing hours can create a sense of competition. Your agent can advise you as to which tack to take.
Consider the timing
Another consideration when you’re trying to make the most of the market is when you list. For example, agents will often post listings on Fridays to maximize a home’s exposure. Work closely with your real estate representative to find the ideal timing.
Don’t forget…
Whether you’re buying or selling your home in a seller’s market, having a local agent with the right skills on your side can make all the difference. Are you ready to take the first step?
Ready to take your next step? Whether you’re buying or selling a home, we’re here to help in any market! Get in touch to learn more today.
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