Expert Series: How First-Time Buyers Get That Property in a Hot Market
You’ve followed our advice from our last post on how first-time buyers can find a great agent to work with. That’s good because, in most places at this time of year, the market is hot.
Believe it or not, you’re already ahead of your competition just by having an agent. Most people don’t realize this, but agents have private access to local MLS listings. Those listings can take up to 24 to 48 hours to hit the public, consumer website (Realtor.ca). Having an agent who sets up an automatic search for you means that you get a day or two jump on people who don’t have a local agent. You will see listings before the general public does.
In a hot market, “the Number One advantage is speed,” says Peter Kostecki of RE/MAX Twin City Realty Inc., Brokerage, Waterloo. “Being tapped into a local MLS instead of the national MLS gives you that.”
Also key to a first-time buyer is to be pre-approved for a mortgage. Finding the house of your dreams and then scrambling, in a panic, through wads of paperwork, brokers and bankers does not tend to end well. Head out confidently, with your pre-approval in hand. Know, realistically, what you can afford.
“Don’t just guess, hope, or ballpark it,” Kostecki warns. “Have it.”
It’s vital, because the house will sell not necessarily to the highest bidder, but also to buyers who offer the fewest, or cleanest, conditions. Most first-time buyers don’t have a property to sell, so you have more flexibility to meet the seller’s preferred closing date. And sometimes – just sometimes – you might feel confident waiving a house inspection, or committing to one to three day condition period, so the seller doesn’t fear losing momentum.
If you are the first, or among the first, to see a property before others even know about it, and you want to move on it, Kostecki has advice: “If the property is worth the sticker price, go in with a fair offer, probably at ask or very close to, and as few conditions as you can. No one is going to sell for $20,000 under ask on Day One.”
Your agent will go in with a short irrevocable, timeframe on the offer, often demanding a response from the seller’s agent within four or five hours. “So make a strong case,” Kostecki cautions.
He has one final strategy for you, if you want to seal the deal: If you can afford to, put more than the minimum deposit down, to show sincere and serious interest. You can’t lose; if you don’t get the property, you do get your deposit back.
But Kostecki has a much better outcome in mind: “That deposit will come right off your mortgage downpayment and you get the house of your dreams,” he reminds us. “In a way, it’s forced savings.”
Have questions about insuring your first home?
Visit our first time home buyers’ section for answers and advice from our friendly agents.