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How To Win in a Seller's Market

Buying a home or investment is very exciting! But it can also be very intimidating to make your purchase on a Seller’s Market where things are moving fast and over the asking price. Here are some full proof tips to help you secure that dream home!

--- My most recent listing sold in 7 days for $70K over asking with 7 offers. "777" good luck

First, what is a Seller’s Market?

In layman's terms, a seller’s market is a market that Seller’s side in a favor. Real estate works in a Supply and Demand environment. Sellers have the upper hand when the demand for homes is high but the amount of homes available is low. This leading to the well-known "bidding war" situation, where the property is listed well under market value to gain the most amount of offers in a short period of time.

How do I start the process of searching for a home?

The prep is the most important step when the market is HOT. Having a plan and being proactive with your due diligence will help you be one step ahead of the pack. Here is a full proof list to get you ready for battle!

  1. GET A PRE APPROVAL - Get your mortgage pre approval before you start looking. Knowing you are not wasting time looking for a home outside of the budget, and that you know what you can offer. You can beat the process and go in with a strong offer, being confident on your financing during the bidding wars.

  2. PROPERTY SEARCH - Check in with your Realtor, who is already out with clients everyday and knows what is happening. This is a very important step - if you are out with someone who doesn't know what's happening in their market place, you could lose out on that special home!

  3. DEPOSIT - Do you have 5% of the purchase price ready to go? This means accessible within 24hrs of acceptance or possibly earlier. So many times, people think they are ready but this deposit may be in another bank account or trust that cannot be accessed right away! If you are making a purchase of $1,000,000, you need $50,000 ready to go.

In Today's market, the freehold asset is what is really HOT! This means anything without a condominium corp or portion of tied land(POTL). A big thing for my clients to adjust to is there is no longer the option to put in conditions such as a home inspection, nor is it common for the 905 to do pre-list inspections. My clients focus on these 3 things when not having an inspection on hand:

  1. Ask important questions - How old is the home? Who is the builder (if community development ie. Mattamy, Madison Group etc.)? What is the history of this home (last renovation, last maintenance, any replacements)?

  2. Bring an inspector along! Not everyone has $500 to spend every time on an inspector but if time allows for it, why not revisit the property.

  3. Inspection condition - Although this will most likely kill your chances if there's 5+ offers on the table. If you are there with a quick 1 day condition - you may have a chance! We've done it before.

Trust the process! At the end of the day - this is a very tough and taxing market. You have to put in the work and it may not be the first home you try on that you get. The most important thing is to work with an educated realtor and have a great support system, this will set you up for success!

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