If you’re thinking of buying real estate these days, whether its’ a home or condo, you’ve probably heard that our city’s resale market is a “Seller’s Market”. This is due to a lower than usual number of properties on the market coupled with low interest rates.
In January of 2021, the Ottawa Real Estate Board reported that inventory was 43% below where it was in January of 2020. This situation isn’t new. Inventory in our city has been below average for many months.
This has led to higher than usual price increases in Ottawa over the past year, because many properties have been attracting multiple offers. Properties in the hottest neighbourhoods are often selling for above the listed price.
In 2020, the average sale price for a residential-class property in Ottawa, at $582,267, was up 20% over 2019. The average sale price for a condo unit, at $361,337, was up 19% over the previous year.
But if you are preparing to buy in coming months, this doesn’t mean you should panic or hold off on buying in the hopes we will see a return to a more balanced market. It just means you have to plan and prepare for what to expect.
As a Realtor with more than 30 years of experience assisting clients in Ottawa, I’ve navigated Sellers’ markets many times, and can help you find a home that will suit your needs.
If you’re considering purchasing in our Sellers’ market, here are tips and strategies I’ve been recommending to Buyer clients:
Contact me Early:
In a more balanced market, a Buyer can contact me and we can start looking for properties right away.
In a Sellers’ market, when there is a lack of inventory, you must plan ahead. If you’re thinking to move this summer, this is the time to get educated about the market.
We can chat about the kind of property and price range you’re looking for and the areas where you hope to live. Depending what you’re looking for, I can possibly suggest other areas that are similar in character but which might be lower priced. And I can start reaching out to my extensive network of fellow Realtors across the city for something that suits you.
We Realtors receive advance notice of listings before they appear to the general public on MLS websites, so I can alert you when something matching your wishes is hitting the market. We can act quickly in arranging a showing and putting in an offer.
Keep in mind that our expertise in neighbourhoods, prices and negotiating offers comes at no expense to you as a Buyer. Our fees are included in the purchase price set by the Seller, and it is the Seller who pays the commission.
Get Your Financing in Place:
Getting pre-approved for a mortgage by your lender or mortgage broker is essential these days in a fast market. You want to show a Seller that you are qualified to purchase and that you are qualified to purchase. This will allow you to act quickly and with a strong offer to the Seller.
With a full pre-approval, a lender processes your qualifications so that you will know how much you can spend based on the amount of your down payment, income verification, and other financial obligations. Your pre-qualified mortgage will usually be guaranteed at a specific interest rate for up to 120 days, along with the promise of a lower rate if rates drop before you purchase.
Have a clear idea of your must-haves and nice-to-haves:
In a Sellers’ market, doing your research and having a clear idea of what you want will help you to act quickly. This will include looking at recent sales in the areas of interest.
Before you search, get to know which neighbourhoods and areas of the city most appeal to you.
Even before we officially begin searching together, it’s good to spend time looking at MLS listings to get an idea of what is on the market in your price range.
It really helps to have a clear idea of which features are your must-haves, and which features might be nice to have but aren’t essential.
If you are looking for a condo unit, for example, is a balcony or patio a must so that you can enjoy some outside time, or would you be OK without one?
Do you need to be within walking distance of an LRT station, or would a bus ride be OK if this could mean a lower asking price?
If you want a house, is a garage a must or are you ok with just a driveway?
Having a clear idea of what you want will help you to move quickly when a suitable property enters the market.
Be Prepared to Act Quickly:
In a slower market, you might have the luxury of seeing a property that you like and then spending a few days thinking about is as you continue seeing others.
In a Sellers’ market, however, you need to be decisive and prepared to move when you see something that ticks your boxes. Appealing properties can be nabbed in a day or two of entering the market.
The sooner you show a Seller that you are interested, the better chance you have of getting the property ahead of another Buyer.
That doesn’t mean you have to rush into something that isn’t right for you.
But that’s why you should have a clear idea of what you want before you begin searching, so that you will recognize a winner when you see one and don’t have to spend a lot of time thinking about it.
In a multiple-bid situation, keep calm and keep your focus:
One of the most stressful elements of a Sellers’ market, particularly for first-time Buyers, is finding yourself competing with other Buyers for a property you love.
I have helped many Buyers through these situations and can help you to put your best offer forward.
In a Sellers’ market, one strategy recommended by some financial experts is to look for properties that are well below your maximum approved price. That gives you room to bid higher than the asking price if you see a dream property and others are also likely to go over the price.
But be careful not to let your love for a property get the better of your finances.
Keep a top price you are willing and able to pay in mind and don’t get carried away. Your dream home won’t be as happy if you get it at the highest end of your range and you then find yourself struggling to meet other expenses.
Keep in mind that in a multiple-offer situation, it isn’t always the highest bid that will win.
If you are prepared to show flexibility, such as with the closing date, and make as few requirements as possible, this can help your case with a Seller and they may decide to take your offer over a slightly higher one.
Sometimes a sincere, heartfelt letter can also help create a connection. If you fell in love with a property, whether it was a stunning renovation or of a beautifully tended garden that you dream to take care of, a letter explaining what you loved and you and your plans for the property can make a difference.
Of course, a nice letter won’t necessarily win you a home over a competitor who is offering thousands of dollars more, but if the offers are close, a sincere letter can make a difference.
Don’t go overboard in willing to be flexible, however:
Some Buyers in competitive markets go as far as offering to purchase without requiring that the sale be conditional on a home inspection first. I might suggest a home inspection in advance of submitting an offer, and / or the Seller may already have one to provide for your review.
While waiving this condition will naturally appeal to a Seller, I will guide you through whether it’s essential and we will talk about the pros and cons of including this condition. We can talk about costs related to maintenance and repairs so that you have a good grasp on home ownership and what to expect.
Keep Positive and Don’t Get Discouraged:
With 30 years of experience assisting clients in multiple-offer purchases, I’m proud of my track record in helping clients succeed when competing with other Buyers.
But if another Buyer happens to succeed over your offer, my best piece of advice is not to get discouraged.
I know buying a property can be an emotional experience and it’s disappointing to lose on a house or condo you love. But in many cases where a client was not successful on a first try, we’ve later found something they liked just as much or even better than the one that got away.
Stay cool and be patient, and we’ll do our best to find you something you love.
If you’re considering buying or selling in Ottawa in coming months, I’d love to chat about the market and about the expertise I can offer.
You can read more about me and see my current listings at www.nancybenson.com