With house prices unaffordable for most and record low inventories it is becoming extremely difficult as a condo buyer in today’s market. Offer dates are the new norm, bully offers expected, conditions out the window and even line-ups just to get in to see places. Just yesterday I had to wait in a line 4 deep just to view a property on a Monday around 5pm!
Still, some people are brave enough to enter this market, and there are deals available, but if you want to go after that nicely staged underpriced property in this market, then you best come prepared.
Here are some things you should expect if you plan on buying a condo in this market:
- List Prices Don’t Mean Anything – Every condo might as well have $1 as the asking price if they are holding back offers. Realtors have been using a marketing strategy for years which consists of under listing by about 5-10% to generate a huge amount of interest and generate a huge frenzy of buyers. While I agree on the listing side it works, in this market even just listing close to market value will likely have the same outcome with fewer disappointed people on offer night. If your budget is max $400,000 you are probably wasting your time to go see anything listed at $399,000 that looks amazing in pictures and holding back offers.
- Have Your Finances In Order – To get the best deals in this market, you need to move FAST. This means knowing exactly what you can afford, having something from a bank or mortgage broker that they will lend you $X and then getting an offer in before anyone else.
- Most Properties Are Selling For Over Asking – In the last week (March 14-21) there were 150 condo sales in downtown Toronto (C01, C02, C08 & C09). Of these sales 23 sold under ask (15.3%), 11 sold at ask price (7.3%) and the remaining 116 sold over asking price (77.3%). From the ones that sold under ask, 7 of the condos were over $900,000 (4.6%).
- If You Are In Multiples Be Prepared To Go In FIRM – In competing offer situations money isn’t always the #1 reason on why people win. An offer $10,000 less than the highest offer may be the most attractive if it has fewer conditions. This means you need to work with your realtor to develop a team that is on standby when something great comes up. Most lawyers will review the status certificates before an offer if they are handling the closing, and if you have your mortgage provider on speed dial they can tell you what you can afford on the spot. If the condo requires a home inspection this may mean doing this before offer night so the condition can be waived or understanding all the risks ahead of time of not doing one.
- You May Need To Be A Bully – If you want to avoid waiting til offer night because you feel the place is going to get a lot of interest, try submitting a bully offer. This is an offer that is typically over asking enough to convince the seller to forgo the offer date.
- Find A Creative Realtor – When selecting your realtor, find someone who is not just going to wait for properties to hit MLS where everyone else is looking. It may take going out a few times to really find what your ideal property but once your Realtor knows they can get creative and look for deals off-market by networking with other agents, combing through expired listings, and even looking at the rental pool. I’ve even sent letters to people in buildings and managed to get showings for several clients in the past if they really liked a specific type of unit.
- Timing Is EVERYTHING – Deals don’t last long. Trust your Realtor if they find a good deal and get in to see it AS SOON AS POSSIBLE. Sneaking out of work early could lead to you saving tens of thousands of dollars but not acting could just mean that the asking price of the next similar place just went up.
If you have any other questions or need help buying something in this market, just contact me below: