The Toronto real estate market seems to have gone awry and getting a house in Toronto, let alone the one you want, isn’t easy. These are our proven strategies for getting the house you want in this crazy market.
Be Ready for Bidding Wars
If you’re planning to buy property in an area that is even remotely popular, you’re going to need to be ready for a bidding war. This is the new norm when buying a home in Toronto. Here’s how to prepare:
- No Conditions. You need to come to the table with a clean offer by dealing with any issues before hand. Make sure that you’re comfortable with the financing arrangements with your lender and the home inspection is done (most sellers do this before listing).
- Have your deposit in hand and ready to submit with your offer
- Do your best to meet the seller’s conditions and closing date
- Put your best foot forward – go in with your best offer. You typically will not get another chance to improve it
- Be at the offer presentation so you can respond quickly if changes need to be made
Put Your Best Foot Forward
Predicting what a house will sell for (especially in this market) is a combination of science, experience and instinct. A Realtor worth their salt should be able to guess the selling price within 2% or less (like we have done time and time again). It involves a combination of past sale prices, increase in market change over time and the amount of competition in a given area or for a particular type of property.
The goal is to put in an offer that you’re financially comfortable with and one that separates you from the rest of the competition (without “over paying”). By being too close to other top offers, the seller will usually send you back for another round and you’ll end up paying even more than if you had just made up the difference in the first place. Again, a good Realtor will have a strong sense of where you need to be price-wise in order to compete without blowing your brains out.
The selling price of this house will dictate what the next house just like it will sell for. A house that sells for $900,000 sets a new baseline for the next similar house that goes on the market. If you aren’t willing to pay what this house is worth now, the next house will be that much more expensive and further out of reach. Work with your Realtor to understand what waiting could cost you and the financial implications of taking this house off the market now or waiting for the next one.
Don’t Wait Until It’s Too Late
In the Toronto real estate market, you need to see listings as soon as they come out. All Realtors have the ability to send you listings the minute they come out through a tool called Collab (Ask your Realtor to set you up if you’re not on it). Go see the houses you like right away. Waiting a few days could result in someone else buying the house before you even see it. Make sure that you have your financing in order and your deposit ready to go (waiting for your financial advisor to move money could mean missing your chance). As soon as you know you the like house, work with your Realtor to move quickly.
You May Need To Compromise
If you feel like the perfect house is slightly out of reach, you’re not alone. For most buyers, regardless of budget, there will likely be things that you will need to compromise on. First time buyers might have to settle on a smaller space to get parking and a quick walk to transit. Even our 2-million dollar home buyers find themselves compromising on lot size and finishings to get into their ideal neighbourhood.
You need to find a balance between your budget, needs and nice-to-haves. Figure out what you can’t live without and be flexible on the things you don’t need to be happy.
Is it Time to Be A Bully?
If you’ve been through the emotional rollercoaster of falling in love with a house, losing in multiple offers or finding out that someone took it off the market before you even had a chance to see it, then you may have considered being a bully on your next offer.
In a competitive market, sellers will “hold offers” (aka holding back offers) until a specific date, meaning that they want to give all buyers an equal chance to see a property before accepting offers. The hope is to create a competitive interest and receive multiple bids on offer night. A successful bully offer is one that is submitted before the offer date and exceeds the sellers expectations on what they will receive on offer night.
Winning with a bully offer (without “over paying”) requires taking several factors into consideration. A seasoned Realtor will be able to walk you through the process and what the delicate balance might look like.
Be Ready to Respond to a Bully
Bully offers have become the new norm for properties in demand. When a bully offer is registered on a property you have seen, your real estate agent will be notified and will often only have a couple hours to respond. If you see a house you like and are planning to come to the table on offer night, let your Realtor know right after you see it so they can do a price analysis and get the paperwork ready. You should already have all your ducks in a row (financing approval, deposit ready to go, no conditions, home inspection complete).
Look For A Diamond In The Rough
If you’ve been looking for that fully renovated house – perfect for you and your significant other to raise your shiny new baby(ies) in – you’re not alone. We’re seeing many buyers put their desire for a fully renovated dream home before their investment needs. While there is nothing wrong with paying a premium for turnkey house, if you’re willing to do some of the work yourself, you might find a potentially great opportunity that other buyers have overlooked.
Literally as I write this, clients of ours are signing a deal on a house in a top Mississauga neighbourhood that should have sold for at least $50,000 more than they paid – simply because the house lacked curb appeal. The most popular homes among buyers are the fully renovated houses and the gut jobs. Somewhere in the middle is that ugly 70’s home that buyers can’t see past. If you’ve done your due diligence and confirmed that there aren’t any major issues with the house, there is often a great opportunity to move into a place that you can call home and fix up over time.
Your Realtor Can Make The Difference
Realtors have literally become a dime a dozen (there are more than 45,000 in just Toronto alone). Experience matters. Chances are that you know someone (or multiple people) who have a real estate license. Our advice is to interview three (or more) agents to understand what experience they bring to the table and how they can help you achieve what you’re looking for. Ask your friends who they used and what their experience was like. You want to find a Realtor who understands your needs, knows the market inside-out and who can best represent you at the table.
If you’re looking to buy or sell, we’d love to help. Feel free to shoot us a message or give us a call 🙂