Based on an article by Christine Ryan Jyoti posted originally on LearnVest
Believe it or not, spring and all its glory is right around the corner. I mean, it must be, right? There will come a day soon when birds are chirping, flowers are budding and 'For Sale' signs start popping up on lawns near you.
Since Toronto's overwhelming sellers' market continues to rise at an even accelerated pace, you need to get prepared if you plan to buy. Lack of preparation while in a competitive seller’s market is the major pitfall for any buyer. So here are some tips for boosting your chances of success—and possibly snagging that dream home by summer.
Tip #1: Close That Laptop—and Go on a Fieldtrip
These days, using real estate sites to explore your options is par for the course: almost everyone searches for listings online during their home-buying process.
Kicking off your search online is a good move, but don’t dawdle too long behind the computer screen—inventory is expected to be tight so if you spot one that has you curious, trade your slippers for blundstones and go there in person.
As demand will outstrip supply, so buyers have to be in a position to make a decision quickly. Plus, what you view online may not necessarily reflect what you see when you pull up to the curb. The Internet can tell only part of the story—and it’s usually the part the seller wants you to hear. Use the internet as an alert rather than a decision-making tool. Your Realtor can set up instant updates for homes in desired neighbourhoods so you can be notified of new inventory quickly. You want to know of a home the day they list.
Tip #2: Educate Yourself on Market Values and Trends
Buyers need to get up to speed quickly on market values so they know the right decision when it presents itself. The more quickly buyers can educate themselves, the more successful the home search will be.
This, of course, is where it’s really all about location, location, location. If you are choosy about where you want to live, be prepared to either raise more funds or lower your expectations of finish.
Although prices are through the roof, they are going higher with each property sold. Waiting, in this scenario, is not a solution.
Tip #3: Nab Low Mortgage Rates—Now
Another reason not to dawdle too long? You want to take advantage of low interest rates while they last.
With mortgage rates remaining historically low, buyers can wrap up the most house their money will afford them at payment levels that should be affordable for many years to come. With interest rates so low, monthly mortgage payments can be on par if not less than rent.
Bottom line: It’s a prime time to jump on a home loan. After all, mortgage rates can be unpredictable—and a decision to raise interest rates mid-year, as many economists predict, could cause them to climb.
Tip #4: Build Your Home-Buying Dream Team Before You Bid
If spring-cleaning season has you in a hyper-organized mood, channel some of that spirit into your house hunting—in order to be a serious frontrunner in a bidding war, you’ll need to have all of your ducks in a row.
So not only will you need a savvy real estate agent, but you’ll also want your lender, inspector and attorney at the ready so you can act fast.
And let’s not forget completing your mortgage application and having your loan amount determined in advance. With the winning bid typically unconditional, buyers must be 100% pre-approved before submitting an offer. This way not only are you removing the risk as buyer, you gain the confidence of the seller that you'll close.
Tip #5: Keep Sweeten-the-Deal Moves in Mind
You’ve finally found 'the one'—but you’re in a bidding war with another equally prepared buyer. How do you win by a nose?
Clauses matter. What you request from the seller in your agreement of purchase and sale, and more importantly what you don't, is an often overlooked detail that in the end makes for a serious difference.
Getting fully approved for a mortgage can help you remove the financing contingency, while conducting a pre-inspection prior to making an offer, means you do not need a home inspection contingency in the offer.
Significant too is finding out when the seller prefers to close and using that closing date in your contract.
All of these perks can add up to much more than you think. Many sellers prefer no risk and perfect timing to a few more dollars, so presenting a risk free, timely offer is worth preparing for.
In short, keep these major points in mind as you venture forth into the market:
- figure out what you want
- get your financing straightened out
- when the right property comes along, be ready to pounce ... quickly !