Tips for Buying a House in a Hot Market

The real estate market is hot and becoming more competitive in many areas across the country. Inventory is below average and home prices are rising as inventory shrinks, mostly in large cities like Toronto.

There are several areas where buyer demand has increased while the inventory has decreased. In the last few months, it has not been unusual for a house to be shown to prospective buyers by more than six agents on the first day on the market. In many occasions, a decisive buyer has jumped in and bought the home, while others are calling and asking if the seller would pay closing costs, leave the drapes.

If you want to increase your chances of obtaining your “dream” home and lowering your chances of losing out to another buyer here are some great tips:

1. Get pre-qualified for a mortgage.  You’ll be able to make a firm commitment to buy and your offer will be more desirable to the seller.

2. Stay in close contact with your agent and clearly express your needs. Request your agent to be notifying you as soon as a home that fits your criteria goes on the market. Be ready to see the house on a short notice – if it is a great home, it will go fast.

3. Keep in mind that there’s no such thing as the “perfect” home especially if you’re in a market where prices have been consistently rising. Instead, set priorities. Determine what you’re willing to sacrifice.

 4. Be ready to make a decision.  Spend a lot of time in advance deciding what you must have in a home so you won’t be unsure when you have the chance to make an offer.

5. Bid competitively.  You may not want to start out offering the absolute highest price you can afford, but don’t go too low to get a deal. In a tight market, you’ll lose out.

6. Keep contingencies to a minimum.  Restrictions such as needing your father to see the home, or wanting to delay the closing 60-90 days can make your offer unappealing.  In a tight market, you want to stand out as the most appealing buyer for the home.

7. Get a professional inspection before you buy the home and sign the final mortgage loan papers. Otherwise, you’ll be left in the dark about any hidden defects in the property.

Most importantly, if you’re determined that now is the time to buy, don’t be timid. You’ll need to be ready to act on a moment’s notice and present an attractive offer as soon as you see that close-to-perfect home that hits the real estate market.