| Recent statistics from the Toronto Real Estate | | | | Once again, in a seller's market, when inventory is |
| Board indicate that current active MLS listings are | | | | low, it is imperative to act quickly when the new |
| way down (approximately 47% percent down) from | | | | listings appear. If you wait for the weekend, or for a |
| those of a year ago. Low interest rates, combined | | | | convenient time, the house may be gone. Be |
| with a 'wait-and-see' attitude of many Canadian | | | | prepared to make time for showings as they come |
| sellers, have resulted in a situation very different | | | | out. |
| from the market in many U.S. cities. Reports of | | | | 6.) Have an offer strategy when multiple offers are a |
| bidding wars in some prime Toronto neighborhoods, | | | | possibility |
| and even in some suburban neighborhoods, have | | | | Discuss with your agent how you will deal with |
| confounded the experts, and many buyers and their | | | | competing offers. Experienced agents know |
| agents have felt frustration in losing out in what turns | | | | strategies which will help you to come out on top |
| out to be an irrational bidding war with other buyers. | | | | when you have to compete. Have a price ceiling in |
| There is nothing more frustrating to any buyer, or | | | | mind. Your agent will know how many other offers |
| their agent, than finding the perfect house, and then | | | | are competing, but they will not know what the |
| losing it to someone else who bids a higher price. | | | | other offer prices, terms, or conditions are. How high |
| In a market such as this a pre-planned strategy is | | | | will you go? You need to discuss this beforehand. |
| vital, as decisive action is required in both the search | | | | There are plenty of ways to make your offer stand |
| and the offer process. Patience is often also required, | | | | out, apart from the offer price; make sure you give |
| as more time is often needed in finding that perfect | | | | the largest good faith deposit possible. When there |
| home. Once the desired home is found, you will need | | | | are two nearly identical offers, and one contains a |
| to be ready to make an offer based on the seller's | | | | larger deposit, the seller will naturally accept the one |
| time frame parameters, so 'sleeping on it', consulting | | | | with the larger deposit. Make sure your agent |
| with friends or family, or viewing multiple times, may | | | | contacts the listing agent, and determines the most |
| not be possible. | | | | acceptable closing date for the seller - and then |
| In this type of market, an experienced, expert | | | | match it. Only include conditions which are absolutely |
| professional Buyer's Agent is worth their weight in | | | | necessary. Once again, your agent, if they are |
| gold. | | | | experienced, will check with the seller's agent to see |
| Here are some tips in how to get the house you | | | | which conditions are o.k. to include. |
| want in a low-inventory environment: | | | | 7.) Understand the risks and liabilities of making a firm |
| 1.) Use an Expert Professional Full-time Realtor who is | | | | offer |
| knowledgeable about the neighborhood | | | | Most offers contain at least one or two 'conditions', |
| In a market where the better homes are snapped up | | | | which allow the buyer to buy conditionally, and which |
| almost immediately, there is no better contact to | | | | allow the buyer an out clause in case the conditions |
| have than an experienced, professional, full-time | | | | are not met. Typical conditions would be those on |
| Realtor, working for you. Going it alone, despite all of | | | | financing approval, on home inspection, on |
| the information available online, will place you at a | | | | condominium Status Certificate (if the subject |
| disadvantage when there is competition among | | | | property is a condominium), and on the sale of the |
| buyers, and a good realtor will use all their skill and | | | | buyer's property (if the buyer also has a house to |
| experience to get you the house that fits your | | | | sell). When multiple offers are present, all these |
| needs. | | | | conditions create a disadvantage for the buyer. |
| 2.) Sign a Buyer Agency Agreement with your | | | | When there are identical or similar offers on the table |
| Realtor | | | | from multiple buyers, the seller will naturally select the |
| When the benefits are properly explained, savvy | | | | offer with the fewest conditions (the fewest risks |
| buyers will be eager to sign a Buyer Agreement with | | | | for the seller). Many sellers in the Toronto area will |
| their agent. The key principle at work here is that, if | | | | pay for a professional house inspection themselves, |
| a Buyer Agency Agreement is not signed between | | | | and have it ready for the buyer's perusal, thereby |
| the buyer and their agent, then by default, the agent | | | | negating the need for a home inspection condition. |
| is working for the Seller! You must remember, it is | | | | Here again, an expert realtor can advise which |
| the Seller who is paying the commission, and it is only | | | | conditions can be included on a competing offer, and |
| through the entering into a Buyer Agency | | | | which should be not included. The biggest risk for any |
| Agreement, where the agent becomes legally bound | | | | buyer is to make an offer 'firm', with no conditions, |
| to act in the best interests of the Buyer. While some | | | | specifically with no bank finance approval condition. |
| buyers are reluctant to 'tie' themselves to a Buyer | | | | Unless you are paying cash for the house, you must |
| Agent, what must be remembered is that the | | | | be sure that the bank approval will be forthcoming. |
| agreement also 'ties' the agent to the buyer. Once | | | | Remember, the offer, if it is accepted by the seller, |
| the agent is working for you the buyer, everything | | | | is a Contract, which must be fulfilled. Banks will |
| they do must be in your best fiduciary interest, and | | | | approve you, the Buyer, but they must also approve |
| there is a long list of obligations that they are obliged | | | | the transaction. Banks will send out a bank appraiser |
| to make to you. | | | | to appraise the property, to ensure that the money |
| 3.) Have your agent set up a Buyer Contact system, | | | | loaned is for an amount appropriate to the value of |
| whereby the MLS system e-mails you automatically | | | | the house. If you have bid higher than the appraised |
| with new listings in your price range and area, as | | | | value (in a bidding war), then the bank may not |
| they come out. | | | | approve the full loan amount. So it is very important |
| Most big city Multiple Listing Services provide a | | | | to discuss these issues with your realtor and with |
| contact system where the computer e-mails the | | | | your lender, to know exactly how high you can go. |
| buyer with every new listing that comes out in the | | | | 8.) Make sure your agent does a thorough |
| geographic area specified, in the price range and type | | | | Competitive Market Analysis prior to making the |
| of property requested. It is like getting an RSS feed | | | | offer. |
| from the Real Estate Board itself, and the service is | | | | This is Real Estate 101. Make sure that your realtor |
| free and is easily set up by the Realtor. These | | | | shows you the prices for recent sales of |
| updates are delivered into your inbox daily, and are | | | | comparative properties in the neighborhood - this will |
| automatically generated. When you see a house | | | | give you a sense for what price the home you are |
| which interests you, simply contact your agent to | | | | interested in will go for. Remember, though, that no |
| view. | | | | two houses are alike, and that adjustments need to |
| 4.) Get Pre-Approval from your Lender, and make | | | | be made, and that everything from condition, to |
| sure that you understand all the terms and conditions | | | | location on the street, to time of the year will impact |
| of the loan commitment. | | | | sales prices. |
| Nothing could be more important, or simpler to action, | | | | 9.) Understand all the closing costs, so there are no |
| than a pre-approval from your bank, mortgage | | | | surprises later. |
| broker, or lending institution. This service is free from | | | | Once you have successfully gotten the home of |
| almost all lenders, and will typically be good for a | | | | your dreams, there are closing costs for things like |
| period of anywhere from 60 to 120 days. Once you | | | | the Ontario Land Transfer Tax, and for your lawyer's |
| have the pre-approval in place, then you know how | | | | services. These amounts are due on the closing date |
| much you are qualified for, and how much you can | | | | (the day that you get the keys and take |
| offer on any property. If you are a first time buyer, | | | | possession). Having an accurate idea of what these |
| your agent can connect you with lenders who can | | | | closing costs will be is something which your realtor |
| help. If you suspect that there could be difficulties | | | | can provide you with. |
| from past credit issues, get these cleared up through | | | | These are just a few of the many tips and |
| the pre-approval process. Often, a minor credit issue | | | | strategies which an expert Realtor can provide you |
| can be cleared up with a simple explanation. Credit | | | | with, when you are buying in a competitive market. |
| approvals can be verbal, but it is always better to | | | | Using them wisely can make the difference between |
| get them in writing. | | | | getting the house of your dreams, or watching it go |
| 5.) Be prepared to view homes as they come on the | | | | to someone else. |
| market | | | | |