No word of a lie… the market we do business in is currently quite hectic. From low supply of inventory to high demand on the buyer side, the pressure is causing prices to jump. Homes that are priced well are inciting multiple offers at a staggering pace, leaving buyers frustrated and very often completely disheartened. Finding your “dream home” is becoming increasingly difficult because your dream home is often five other people’s dream home.
We are not here to further dishearten you… we are here to help. And we hope your agent has been doing all, if not the majority of the activities and actions below that are used to make buying much more efficient and less stressful in order to give you the best chances of getting the home you not only want, but often need!
Here are the 6 ways to best prepare yourself in this crazy market.
1. Get Yourself Pre-Approved For A Mortgage
And no, this doesn’t mean use the mortgage calculators on a major bank’s website. This in no way constitutes a pre-approval. Why, you ask?
First, it gives you and your agent clear objectives. If asked, some agents will go look at a house no matter what it is. This is not a good use of their time. The agent you hire should be there to guide you and institute a process of elimination rather than one of selection. It is about narrowing down potential options and forgetting the rest. Which leads to the next point:
Achieving a pre-approval sets realistic expectations. Why bother torturing yourself looking at $500,000 homes if you know darn well you only qualify for one at a cost no higher than $450,000? That is personal torture, and a waste of time for all parties involved.
Lastly, a buyer that is pre-approved is more likely to have their potential offer accepted. Many diligent listing agents will ask you right up front if your respective buyer is pre-approved. This is because seller’s often work tirelessly to prepare their home and it really isn’t fair to waste their time if you don’t even qualify… not to mention the loss of time incurred on part of your chosen agent.
Pre-approval is definitely not perfect, but it sure goes a long way in helping yourself prepare for a potential offer. Do this first.
2. Have 2 or 3 Building Inspectors Lined Up
I do not need to tell you how important an inspector is in the process of buying… This is common sense. However, I do need to inform you of something often forgotten: Inspectors are not at the mercy of your particular situation. They are almost always first come, first serve.
Further prepare yourself by having at least 2 or 3 inspectors cued up and make them aware of your situation. The first thing this does is it shows them that you value their time. This type of care can often lead to them pulling more strings for you because they will already have your contact information, and perhaps even know the type of dwelling you seek. And the thing about showing respect to a professional of this type, is that they just might sneak you into otherwise unavailable spots. Good people tend to help good people, after all!
Having your inspector(s) ready to go also means that you just might be able to institute a shorter time frame for subject removal dates, because your inspector is not only aware of any given offer situation, but also can give you available booking times up front before you even achieve an accepted offer. Why bother having a 14 day subject for inspection if you can get it done in 10?
Find a reputable inspector, and keep them in the loop!
3. Know the Current Market Conditions
This seems fairly obvious, but it’s an important one. While most people understand that today’s market is a little crazy, most do not understand the actual conditions that underlie such a statement. Are prices rapidly increasing? If so, what is the cause? Is it a crazy buyers market or a crazy sellers market? How long is the average time it takes to sell a single family property over the last 6 months?
It is not enough to be able to categorize the market as any one thing without understanding the actual conditions that form the basis of it.
Knowing specific market conditions not only works to standardize your expectations, but it goes a long way in dictating the type of behaviours you should be following in order to be successful within it. And when it comes to this North Okanagan market (well, the Okanagan markets in general even), seeking market information will help prepare you for our next point.
Get your agent to keep you informed on market conditions.
4. Expect and Prepare for Multiple Offers
It’s true: multiple offers can be stressful. They are predicated on competition and drive up prices in the marketplace. They are stigmatized because of these facts and some people go as far as to “not compete” no matter the circumstance.
Well I’m sorry, but unless you accept the conditions and adjust your tactics, you are unlikely to get the kind of home you want in this type of market. The most important aspect that is critical here is that this sense of decisiveness gives you an advantage, rather than a disadvantage. There is nothing smart about behaving the same way in every market… when the market changes, we must change with it. If you are the type to “never compete”, for whatever the reason might be, you are putting yourself at a disadvantage in this marketplace.
Do not fear multiple offers… we are here to help you through them. We are here to ease your nerves, guide you through the process, and give you the best chance possible during a competing offer situation.
Trust your agent, and let them guide you!
5. Perform As Much Due Diligence As You Can BEFORE You Offer
Due diligence usually manifests itself in the form of subjects. Subject to financing, subject to inspection, etc. Well….
In multiple offers, subjects make your offer less attractive.
Let me begin this section by saying subjects are very necessary and work to protect you as the consumer. It is not my business to tell you how to protect yourself. It is at your discretion how much protection you desire, and often savvy buyers will know the caveats of having too many subjects to a greater extent than a new buyer. That being said, performing due diligence up front before an offer is made or accepted is a great way to get ahead of your competition because some of those buyers may not have gone through this effort.
This can be in the form of getting a lawyer to review the title search for you while your agent prepares the offer. This can also entail reading, reviewing and approving the Property Disclosure Statement so that it does not need to be a subject. During the offer process, inform your insurance agent, your mortgage broker, and your lawyer. If you’ve performed your due diligence, it may not be as necessary to have them in the contract as subjects. *(Be sure to speak with your REALTOR® to guide you on this topic)*
Do as much work and due diligence as you can, UP FRONT!
6. Want A Real Advantage?
There is a way of thinking about buying that forms a true advantage to the competition you face as a buyer in this market. In the current real estate landscape where most are fixated on prices, preferences and resale value there lies a mindset that can separate you from the other buyers who also want what you want.
And like true advantages, it wouldn’t be one if the entire public knew.
Call Chris Holm & Associates at RE/MAX Vernon and ask for Shelby or Brent. We are happy to give you give you the inside scoop. Our office number is: 250-549-4161.
And don’t worry, we’re not salesmen. We are consultants and our only interest is separating you from your competition. Call us to have a chat so we can discuss how to give you a true upper hand. We have been more than happy to provide you with the above tips for giving yourself and advantage, and we want to continue to provide you with important value.
Yes, the market is heating up. Yes, prices are going up. Yes, we are a lifestyle marketplace and this trend will likely continue. So get yourself an agent (Oh hi there!), and let’s discuss your goals. As mentioned, we are not salesmen… we are facilitators that work in your best interest and we work very hard to accomplish your goals. It has always been our contention that REALTORS® need not be salesmen.
Keep this resource in hand, and keep referring to it every few weeks as a buyer. Continuously inform your agent, and ensure they are accountable to you and have a system in place to guarantee you good service. In this busy market, this is absolutely paramount. An overextended agent/team whose primary goal is sales volume only benefits them, and therefore your needs become secondary.
We hope we have helped you out, and we have been happy to do so. Buying in this market does not need to be so difficult. Feel free to give us a call about how we can help you further… It’s our job, we’re good at it, and we LOVE IT.
Chris Holm & Associates of RE/MAX Vernon