Top tips for home buyers
7 tips for home buyers in a sellers’ market
Trying to buy a property in Vancouver’s seller’s market can be frustrating, but you can be successful with these 7 tips:
- Stay positive – We know what it’s like to be caught in a seller’s market in Vancouver where it seems like everything is selling too quickly at higher and higher prices. I recall trying to get into the westside market and going to open houses every weekend and seeing the same faces of other buyers in my price band, and feeling completely deflated because I couldn’t find anything I wanted, and the places I did want were getting snapped up in multiple offers. But don’t give up because there are opportunities in a seller’s market and you just have to be ready for them.
- Don’t go it alone—work with a professional – You are smart and capable of negotiating your own deal. But trying to buy a property without a realtor is like representing yourself in court without a lawyer – you might muddle your way through but you will make lots of mistakes, I promise you. In fact, it’s even worse because buyers are not allowed to present offers directly to the seller—only realtors are allowed to present offers directly. So in this metaphor, it’s like you’re representing yourself in court and you are not even allowed to be in the courtroom with the judge and competing lawyer. Furthermore, realtors have the inside track on new listings, have real estate law training, and have substantial experience navigating the many risks and pitfalls involved in buying a home. I don’t understand why some buyers go into the market without their own real estate agent when it costs absolutely zero. The listing agent is working in the seller’s best interests, so why wouldn’t you want a buyer’s agent on your side working in YOUR best interests? There is just no logical reason to go it alone.
- Sign up for automated alerts – Realtors have access to the Vancouver real estate board’s database which is updated about two days before the public MLS website. So ask you realtor to sign you up for automatic real-time alerts of new listings to give you the added edge.
- Be quick and agile – When you receive an alert for a new listing, drive by it the same day and if you are still interested ask your realtor to show it to you within 24 hours. Once you see it and like it then ask your realtor to get as much information upfront as possible so you go into a multiple-offer situation more prepared. For example, ask your realtor for any strata documents that are available, or in the case of a detached house ask if there is a certificate proving there is no oil tank in the yard. Buying a house in a seller’s market is a special project that requires dedication for a period of time. Make it a high priority in your life and you will have success.
- Don’t be afraid of multiple offers – You have just as good a chance as anybody else. Don’t assume that all offers are going to be over asking. For example, recently we attended an open house in East Vancouver where there was about a hundred people viewing the property, but the realtor received only 3 offers and they were all below asking. In our experience there are usually a few offers below asking, a few at full price, and one or two above asking, depending on how close the asking price is to fair market value. So in fact you may only face serious competition from one other party, so it’s not as scary as you might think.
- Choose a strategic price – Before buying, go to open houses to get acquainted with the market and ask your realtor to let you know the selling prices for those properties so you become knowledgeable on fair market value. This will help you craft the right price when you are ready to write on offer. Once you pick a price, add $500 – this is a little tip that we have used with clients many times with success because multiple bids are often around the same price. For example, we helped a client buy a property on the westside of Vancouver listed at $419K. We knew there was going to be another offer, and we figured $400K was too low and $425K was too high, so we settled on $422K and then added $500. Sure enough, afterwards we found out there were two offers at $422K, and $422.5K and our client won the bid. This is just one of many, many tips you’ll need to navigate multiple offer situations, so involve a professional realtor who can help you successfully maneuver your way through this daunting process.
- Plan ahead and negotiate effectively – Your realtor can help you prepare and position yourself to be the winning bidder. If you really love a place and believe it will go to multiple offers, then plan ahead how you can minimize the number and lengths of subjects. For example, consider getting an inspection completed before offers are even presented so you can eliminate the subject to inspection in your purchase contract. Also, consider getting final approval on financing so you can write in a very short duration for subject to financing. Your realtor has the ability to present an offer directly to the seller and has the skills to sell the merits of your offer. We’ve witnessed sellers accepting offers that were not the highest in price, but were presented in the best light by the buyer’s realtor by convincing the seller that his/her buyer was the most capable of removing subjects and completing the deal quickly.
Our Vancouver real estate team has helped hundreds of buyers successfully navigate seller markets, so you can depend on us to provide the support and expertise you need in these situations.