It’s no secret that the Canadian housing market is extremely hot right now. Particularly in Ontario, houses are selling at record-high prices. Since the beginning of the global pandemic in March 2020, housing market prices started to increase and are still on the rise in 2021. According to the Toronto Regional Real Estate Board, the average price for a house in the GTA in October 2020 increased by 13.7% from the previous year. In Ontario, higher demand for single-family housing has increased & bidding wars have reached an all-new level.
So, what does this mean for you, as a first-time homebuyer? Well, a hot seller’s market does pose challenges for you, but this doesn’t mean you can’t buy a house. You are still able to buy a house, but you may just have to be a bit savvier to do so. To help you find a house to purchase in this crazy market, these are a few things you should know about buying a house in a seller’s market as a first-time homebuyer.
Manage your expectations
When it comes to buying a house (regardless of whether the housing market is hot or not), you need to manage your expectations. Buying a house isn’t as easy as picking one of the first houses you look at and buying it right away. As wonderful and informative as HGTV is, buying a house isn’t a process that moves THAT quickly and seamlessly. The reality is that buying a house can be a lengthy process. It takes time to find a property you can both love and afford.
When it comes to setting expectations, the first thing is to be prepared for rejection. You have to get used to hearing the word ‘no’. In a seller’s market, things move quickly, so you may see houses you’re interested in go to other buyers. Don’t let this discourage you though. Just keep reminding yourself there will be other houses. You will eventually find the right house, but you need to be patient. With the increase in demand, there are bound to be bidding wars. You need to know your limits and don’t let it get you down if you don’t get the first house you put an offer in on.
A common mistake first-time homebuyers make is not thinking about what they want in a house before they start shopping. Many first-time homebuyers are unsure of exactly what to look for in a house so it’s important to understand what you want. Create a wish list and do some research before you start shopping so you have a better idea of what makes a house worth bidding on or not. While researching, look into different financial support programs you may qualify for such as the Affordable Homeownership Program or the First-Time Home Buyer Incentive as well. These programs are designed specifically to help first-time buyers like yourself secure the mortgage they need when buying a home.
How to buy a house in a seller’s market
Step #1 in buying a house in a seller’s market is to work with a professional real estate agent. If there is one thing you take away from this article, it is how important is it for you (as a first-time homebuyer) to work with an agent and a skilled mortgage broker. Can you shop online for a house on your own? Sure, you can. But nothing beats the professional advice and knowledge of someone who understands the housing market in your area. Work with a reliable agent who will give you the right information to help you make the best financial decisions. Again, things move quickly in a seller’s market, and no one understands that market better than a real estate professional.
One of the many additional benefits of working with an agent is their access to resources. Many houses sell before they’re listed. So, if you’re shopping for a house on your own online, you’re only scratching the surface of what’s available out there. An agent has connections to houses that aren’t even on the market yet. Also, don’t just set your heart on one neighbourhood. Just because prices are high in one area, doesn’t mean they’re as high everywhere. Look into surrounding towns or cities to see what prices are like there too. You wouldn’t want to miss out on a gem of a house just because you didn’t think to look. Again, a real estate agent would be a great source of information for local and nearby housing prices and can check availability for you too.
All-in-all, the most important thing aside from working with an agent is to just be prepared. Because things move so fast in a seller’s market, it’s beneficial to have everything you need prepared, beforehand, to allow the buying process to go as smoothly as possible. However, never feel rushed into a decision. Buying a house is one of the biggest financial decisions you will make, so choose wisely.
Get pre-approved first
Before you start shopping and set your heart on a house that’s priced a little too high for your budget, it’s in your best interest to get pre-approved for a mortgage first. Tying in with managing your expectations, it’s good to know your budget in advance and check your finances first. Don’t get yourself locked into a mortgage you can’t afford or that the lender won’t fund. Yes, you may love your house now, but if your monthly mortgage payments are drying out your bank account, you’re going to start loathing your house. Falling in love with your mortgage is just as important as falling in love with the house itself.
Work with me, Darren Robinson, and let’s get approved for the mortgage you need so you can buy with confidence in today’s hot real estate market! I’ve helped many first-time homebuyers get approved and navigate the financial side of purchasing a house. With my years of experience as a professional mortgage broker and a financial advisor, I can help you buy your first house too! To get started, let’s set up a virtual meeting — Just give me a call at 705-315-0516. We can do the entire application virtually, on your schedule, right from the comfort of your own home. It’s time we make your dream of buying your first home a reality!