The real estate market has certainly regained momentum! While it’s good news for sellers, and the economy in general, buyers are having to get competitive.
If you’re looking to buy a home within the next few months, where should you start?
“Try to engage the services of a REALTOR® a little bit sooner in the process,” suggests Gordon J. Wallace, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage. “Statistically, buyers traditionally start their search online without an agent about 12 weeks prior to contacting an agent, which was fine in a calmer market.”
Because of COVID-19, the housing supply got held up. Sellers were apprehensive to put their houses on the market. Yet the demand didn’t really go anywhere, if anything, it compounded, because those who would have bought during the normal Spring peak weren’t able to. “All of those buyers have been kind of time-shifted into today’s market,” explains Wallace.
You can still do all of your own research online, simply reach out to an agent sooner. Once you engage the services of a REALTOR®, you get the inside scoop on properties as they sell. You’ll have a better knowledge base so when you’re ready to actually go out and view properties in person—even to make offers—you’ll already have this education under your belt. You’ll know what the homes you’re looking at are likely to sell for – which in today’s market is unlikely to line up nicely with the advertised price.
“The market is really started getting busy again in May and has only picked up steam. Sellers are entering the market in droves and we’re seeing a lot more inventory, though it isn’t lasting long,” says Wallace.
One of the unfortunate realities of buying today is that in Kitchener, Cambridge and throughout a good portion of Southwest Ontario a lot of homes are being put on the market listed slightly under value. This is done to try to increase demand and generate a bidding war for the sellers.
“While it’s unfortunate that you can’t always trust the advertised price of a property online, it’s all the more reason to engage a REALTOR® sooner in the process. We can help you understand the true value of the homes listed online,” he says. “Doing your own research is good to get you to a certain level, but after that you really need the expertise of a REALTOR® to help make sense of it all.”
Your real estate agent will analyze what the property is worth so that if you do end up entering a bidding war, you’ll understand what the property is likely to go for and what is a reasonable amount to pay. “It’s just shifted the onus of properly valuing properties more to the buyer’s agent vs. the sellers,” says Wallace.
How long does a home search typically take? It depends on the price point, says Wallace.
First-time home buyers
For first-time buyers, those at the entry level end of the market, homes are generally priced around $400,000 to $500,000 in our region. The process can take a little bit longer, because there are many properties to sort through, multiple showings and sometimes multiple attempts at making offers.
“There’s a lot of pressure on the lowest rung of real estate because it’s the most affordable for people trying to enter the market, but it’s also the most attractive for investors wishing to pick up properties,” the REALTOR® says. “As a first-time buyer you end up competing not only with other first-time buyers that are trying to break into the market, but with the investor segment who normally is an all-cash buyer.”
This creates additional pressure and can limit the conditions you might want to include in your offer. Wallace’s advice for first-time buyers is to take a more prudent approach to your search and look for properties that are likely to be somewhat unattractive to the investor segment. Homes that are listed slightly above market value are a good bet as they do still exist.
The move-up market
At the next price point are people who have outgrown their first or second home and are looking to upgrade to their forever home. Houses in this range typically go for $500,000 to $900,000 or more depending on the buyer. Ideally homes in this bracket should be marketed with some additional resources, including virtual tours and online virtual walkthroughs guided by an agent, for example.
Wallace also recommends move-up buyers be very clear about what their must-haves and absolutely cannot-haves are. They should have a detailed list that they review with each property, in order to make the best use of their time.
“You should have a real firm sense of what you want in a home prior to going out and viewing properties in this climate, because people are still apprehensive about strangers coming into their home just to look around,” he says.
For move-up buyers the process can sometimes feel a little bit hurried. “It’s important to keep a level head and not feel pressured or rushed into making a snap decision on these homes,” Wallace advises.
At the higher end of the market—homes in the million-dollar-plus range—the timelines are a little bit longer. Buyers tend to be less pressured and more relaxed during the process. When buying a high-end home, the purchaser normally has to sell their home first as a condition. In a more balanced market such a condition would be accepted more readily, but in a very heated market it can get tricky. This is where your REALTOR® can help; they’ll advise you about timing and different strategies you can employ.
Wallace doesn’t think of real estate as a profession that’s about sales, rather it’s half customer service and half marketing. “Most buyers nowadays are finding homes they want to view on their own,” he says. “I’m not going to try to talk you into selling your house or buying a home, I’m going to facilitate your desire to make a move one way or another.”