Despite the Canada Mortgage and Housing Corporation’s (CMHC) gloomy prediction that Canada’s housing market wouldn’t recover until mid 2022, the pandemic has yet to extinguish the red-hot fire that is the Toronto real estate market! According to the Toronto Regional Real Estate Board (TRREB), residential sales were up a whopping 40.3% last month compared to August 2019, and the overall average selling price for a home in the GTA has increased 20.1% since August of 2019.
With fewer listings and high demand in most areas of Toronto, buyers will need to pull out all the stops to close a deal in this competitive market. Read on for 5 tips on how to shop in a hot real estate market.
Drop Your Offer Like It’s Hot
In a competitive seller’s market, multiple offers (aka “bidding wars”) are coming among buyers. One way to avoid a bidding war on the offer date and get ahead of the competition is to approach the seller early with a strong bully offer before the home hits the market. In Toronto, it’s not uncommon to see bully offers that are $100,000 or more over the asking price! Remember: Bully offers aren’t about bargaining—they’re about sealing the deal before the competition has a chance to make an offer.
Be a Baller, not a Bargain Hunter
Save the negotiating for another purchase! Playing ‘how low can you go’ with sellers in a hot market is the surest way to get your offer tossed to the side right out of the gate. Don’t risk offending the sellers with a low-ball offer—always open with your best price!
I’ve got 99 Problems but a Pre-Approval Ain’t One
As Toronto homes go off the market at lightening speed, buyers need to have their financing ducks in a row before they shop. In multiple offer situations, sellers won’t even consider an offer without a pre-approval unless it’s all cash. Not only will a pre-approval show the seller you’re a qualified buyer, it will also strengthen your negotiation ability if you find yourself up against multiple offers. Tip: Going for offers that are $10,000-$20,000 less than your preapproval will give you some wiggle room to negotiate if you find yourself in a bidding war.
Beggars Can’t be Choosers in a Sellers Market
If you want your offer to have a fighting chance in a bidding war, you may have to be more flexible with your ‘conditions of sale.’ Offers full of contingencies on financing, home inspection, or the sale of your home, may put your offer at risk of being sacked by the seller. Make your offer as attractive as possible by steering clear of clauses and favor requests. Now is not the time to ask for a fresh paint job, carpeting, or updated washer and dryer!
Keep Calm and Offer on With the Right Realtor
While being a homebuyer in a super tight housing market is a challenge, it’s not impossible. Working with a seasoned Realtor who knows how to navigate the pitfalls and risks of purchasing a home in these unprecedented times is key to gaining an edge on the competition. I work tirelessly to match my buyers to the perfect Toronto neighbourhood and home and promise to help you safely navigate this new virtual process. If you're hoping to sell your home in Toronto during the pandemic, please reach out to me today. I'm always happy to answer your questions. Call 416-903-7653 or email firstname.lastname@example.org.