Surrey, South Surrey, Langley and White Rock traditional single family homes are in sellers' markets, particularly in certain price ranges and locations. What does this mean for buyers? Well, in a balanced market there are enough houses for buyers and these homes generally take up to six months to sell, depending on price point. More specifically, in a balanced market there is generally six months of inventory across all home types.
In a seller's market, supply of homes is low and there are often many suitors for the same property -- resulting in multiple offers. Often homes sell even before they hit the MLS, through word of mouth, through realtors learning of upcoming listings, or because the real estate agent's lawn sign goes up before te MLS posting.
Currently, in the Lower Mainland single family homes with strongest buyer interest, the "sweet spot", so to speak are:
Surrey Houses: Priced under $700,000
Langley Houses: Priced under $800,000
South Surrey Houses: Priced under $1,000,000
White Rock Houses: Priced under $1,200,000
Being a buyer in a seller's hot market is often a knot in your stomach, nail biting, lose in the bottom of the ninth home purchase experience. So, what do buyers need to know to up their odds of successfully buying the home they desire.
10 tips for home purchasers in the seller's market
- Engage a trusted and experienced real estate agent. In fast moving markets you need a experienced guide. Ask your realtor if they have experience with multiple offer situations. Unique circumstances often require out of the box thinking.
Don't fixate on the BC Assessment value. The assessed value is very often out of date in a seller's market.
Don't expect to get a smoking deal. Often buyers don't adjust to the hot market and make an offer to purchase that is completely out of sync with the market. The seller may come back at asking price (losing valuable time) or, even worse, not even respond to the offer. In these situations your realtor may have to "eat crow" and schmooze the seller's realtor to get back into the game.
Don't sweat the small imperfections. No home is perfect. I have never once had a home inspector say, "everything is perfect, you have a gem here". There is always a list of items to address even in new home purchases.
Write in a "smart" inspection clause. Don't waive the inspection, but write in the contract a threshold dollar amount of deficiencies that you can live with. That is, depending on the value of the purchase, write in an amount that you will promise the seller to not fuss over. For example, on an $500,000 purchase, state in the contract that you will not ask for consideration for inspection shortfalls accumulating less that say $400 to $1,000 (buyer to decide) in value.
Could favourable closing dates sweeten your offer? Have your realtor ask the seller's realtor if they prefer a fast or long closing timeline? Does the seller want to rent back to have more time? This intel could make your offer preferable in the case of close offers.
Be careful with a "Subject to Sale" clause. First, making an offer Subject to Sale without having even listed your home for sale is likely a deathnail to your offer. Every seller's realtor worth their salt is going to ask for the MLS number for the potential purchasers home. In the case of multiple offers, a subject to sale of any form, is hamstringed compared to others. Read my earlier blog "Should You Sell Your House Before You Buy" for more information.
Have all your paperwork in order You may be up against "all cash" offers, and those are very strong competitors. Have preapproved financing and provide evidence of that with your offer. Sit down with your lender to determine how to speed up final approval, do everything they ask, and shorten up your subject removal date accordingly.
Timing is critical If you love a particular home, make your best offer as soon as possible. Ensure this offer is supported by a solid downpayment to show you are serious.
Don't get caught up in winning at "all costs" Don't panic and don't settle for a home you don't love. There's always a compromise, because most homes don't have all the features you desire. Make sure the home is what you are truly seeking. If not, take stock, breath deeply, and step away from that home.
This spring and summer the competition for single family homes rose quickly and prices increased accordingly, catching even seasoned market analysts off guard. The 10 recommendations for buyers that I outlined above is not an exhaustive list, just some best practices. The key to remember is that on homes in the sweet spot, you will have competition, strategy is of outmost importance, so put a good offer together, one that shines against competition.