If you are a buyer right now, you may be more than a little frustrated. In Hamilton, it is definitely a Sellers market. Many of you may have already experienced a competitive offer presentation and know it’s not fun. If your offer was not accepted, it’s even less fun. So here are a few tips to help you:
1. Make sure you have all your finances in order. Are you pre-approved? How much will you putting down? Do you have a deposit ready to go? Do you have your closing costs saved if it’s a quick close? Can you go in without the condition of financing? If so, make sure you understand the risks involved in doing so. If you are a high ratio mortgage, your bank may require an appraisal showing the value of the home. Should that be lower than what you paid, you may have to put more money down on the property than you anticipated.
2. Consider doing an inspection beforehand. If you are competing for a home and there is a set presentation time, getting a pre-home inspection can be smart. If the inspector finds issues you are not ready to tackle, you can walk away and at the bare minimum you will know what you are getting in to. If everything checks out, that is one less condition you will need to include in your offer making your offer stronger. In Toronto where it’s even more competitive, it’s quite common for the Seller to get a pre-home inspection done and provide it to potential buyers. That is great to look at, but you may still want to consider getting your own.
3. Call your insurance company. Tonight I am heading in to a competitive offer situation with my buyers. There are 9 offers and the home has aluminum wiring. I had them call their insurance company to find out how aluminum wiring will affect their insurance and what may be required of them to insure the home. Another client of mine was required to rewire his home removing all the knob and tube in the walls within 30 days of moving in to satisfy his insurance company. He knew this going in and was able to make an educated decision prior to making an offer. For you, this may be more trouble than it’s worth allowing you to move on to the next home.
4. Don’t get emotionally involved. That can be extremely tricky, especially if you have already lost out on a home or two, but overpaying for a home just to win that home is never a good idea. Make sure you have a solid understanding of home values when you are deciding what to offer. I recently showed a 900 square foot war time bungalow on the East Mountain that was listed at $309,900 and sold for $364,000 in a huge bidding war. In my opinion the home required a tonne of work still and the Buyer grossly overpaid. They easily could have considered other homes in a higher price range that offered much more.
5. Consider canvassing neighbourhoods and homes you like that would be in your price range. Realtors may not like me for this, but ask your realtor to canvass neighbourhoods for you to try and find someone interested in selling and willing to consider showing it to you before they list. It can be a long shot, but it does work.
6. Know you will get the right house. It can be extremely frustrating being outbid on homes, but in my experience, it always works out for the best. Trust that and know your house is on its way.
It’s fun being you right now, but I still have tips to help you maximize your best asset.
1. Price it right and make it shine. Yes even in a Seller’s market pricing your home right and showing it in it’s best light are paramount to ensuring you receive the best offer. My client recently bid on a home in the James North area. It had been listed for $249,900 and received multiple offers over asking. The Seller decided it was not enough and rejected their offers and increased the price of his home to $299,900. It sat and sat until my client came along. They were lucky enough to get another bidding war (my client and another), but neither of us advised our clients to pay even close to that and in the end, they received less than they would have if they accepted the first offer.
2. Give Buyers time to see your home! If you are pricing your home right and spending time prepping it, make sure people have time to see it. Your realtor can advise you on this. You may be selling yourself short by not giving potential buyers enough time to see your home. This is where holding off on offers may make sense for you. Your realtor will be better able to advise you what is best for you.
3. Consider doing a pre-home inspection. Yes it is an expense to you, but it could give Buyers peace of mind when deciding whether or not to compete for your home. More offers usually means more money for you.
It’s spring and we are in one of the hottest markets in the country. Be prepared, be smart, and hire someone you trust to help you make the right decisions.
For more information on buying or selling in the Hamilton area, contact me anytime.