The Toronto market is fierce right now. It is routine to see over thirty offers on a single property. Houses are selling within a few hours of coming to the market. House prices are rising daily. The imbalance between supply and demand is very high, causing a busy market that does not favour buyers. Buyers feel like the situation is hopeless. But it’s not! Here is our buyer’s survival guide and five tips to help you navigate this market:
Don’t wait it out: I’m hearing from many buyers that they want to step back from the market until things “cool off.” The market is not going to cool off. While It is likely that there will be more listings in the next few months, there will continue to be way more buyers than there are sellers. Prices will not go down, and the market will not cool off. “Waiting the market out” unfortunately means that you will end up paying more money for a smaller space.
Ask your real estate agent for instant property notifications: There are some apps that agents have access to that will notify you instantly of a new property that comes out in your area. Ask to be set up on this kind of search so that you are up-to-date.
Do bully offers: Bully offers have always had a bit of a bad rap. But, these days they are a necessity. If a property comes out that you like, you should be offering immediately, regardless of the stated offer date. Worst case scenario, the seller asks you to come back on offer night. Best case scenario, you can buy a house quickly while minimizing your competition.
Don’t be scared by the number of offers on a property. When buyers are offering on a property, they often get cold feet when they see how many competing offers there are on the same house. This is understandable, but it is not a winning strategy. You should have tunnel vision for the house. Determine what you think the home is worth, what you are prepared to pay for it, and then offer that price. If you get it, great. If you don’t, move on to the next house. You can’t win if you don’t play.
Don’t expect a second chance on offer night: Many buyers hold back money on their offer and expect that negotiations will go into a second-round where they can then decide if they want to offer their top dollar. This is never a great strategy in our opinion, but it is becoming a terrible strategy lately. When there are so many offers on a property, agents and sellers are becoming wary of the logistical nightmare of negotiating with forty different offers. Often, sellers are accepting offers in the first round. Therefore, bring your best offer the first time.
We could go on and on about offer strategies right now. We’ve worked in markets like this before, and we know how this one will play out. Please don’t hesitate to reach out to us if you have any questions.
The Kim Kehoe Team