If you’re a buyer in greater Vancouver area in the fall of 2022 I have some good news for you. The market seems to be in your favour. You probably have heard of crazy bidding wars, subject free offers and real estate selling for well over the asking price. At the moment the market is slower and this could present a great opportunity to buy. This doesn’t mean that you should buy. That part is really up to you. In this post I am hopping to provide you with 5 tips that would make your buying experience smoother.
1. Get a mortgage pre-approval
I know you’ve probably heard this tip a hundred time already. But it’s more relevant than ever before. First of all the interest rates have been on the rise. By getting a mortgage pre-approval you can lock-in current interest. This is especially valuable if interest rates go up in the future. Second reason why you want to get a mortgage pre-approval is knowing how much you can borrow. Maybe you’ve gotten a mortgage pre-approval a few months ago, and you’re hopping to be approved for the same mortgage amount. Unfortunately with rising interest rates you might be surprised how much your borrowing power is being effected. Chances are you will qualify for a lower mortgage amount than before witch in turn will dictate your real estate budget.
So before going out there and looking for real estate you should get a mortgage pre-approval.
2. Take your time looking. Start early. Get some experience.
When the market was really active buyer felt a lot more pressure to buy quickly. If you waited to long there was a chance to get priced out of the market. Places that used to cost $500,000 now cost $550,000 and some buyers simply couldn’t afford such price increases.
The story is different now. The market for the most part is flat in some cases the prices are even declining. Which is a good news for the buyers. Now you can take your time looking for that perfect property that hits most of your requirements. There isn’t as much urgency behind trying to buy something quickly. In this type of market buyers usually have more choices and are overall more satisfied with their purchases.
3. Don’t drag your feet. Trying to time the market is impossible. When you see something that you like be ready to pull the trigger.
This might seem counter intuitive to the previous point but let me explain. Because, there is less urgency to buy sometimes buyers can fall into the trap of thinking “what else is out there?”. I like this unit and it hits everything in our criteria but “what else is out there?” or “maybe a better unit will come to the market next week?”. Sometimes people are trying to time the market perfectly and buy at the lowest price possible. But that’s impossible. If there was a way to time the market perfectly that would be fantastic but unfortunately there isn’t.
I’ve seen this happen so many times especially with firs time buyers. They find a place that they really like but they fall into the trap of thinking that there might be a better unit out there. Or maybe the prices will go down even lower. We would not make an offer on the unit that buyers really like and the unit would sell to someone else. Months would go by and a similar unit would not come up again.
Don’t rush to buy but also don’t drag your feet. If the unit that you really like and hits most of your criteria is available take action quickly and secure it. You don’t know when another similar unit will come up for sale.
4. Negotiate. And know what places are going for. You don’t want to be unreasonable. But in a current market buyers can score some great deals.
Because the market is a bit slower at the moment you, as a buyer, have more leverage to negotiate and try to lower the price. Of course you have to be reasonable but now is the time to try to negotiate. It’s important to know what is the current value of the property you’re interested in. Sometimes sellers might be unrealistic and they want to sell their property for the prices from 8 months ago. It’s crucial for you and your real estate agent to do the homework and to figure out a fair market value for the property.
5. Make sure to do your inspections and document reviews. Because the market is slower buyers have the ability to review documents properly and to order an inspection.
Slower market means that subject free offers are almost non-existent. Most offers that I see today include conditions: such as subject to financing, subject to reviewing strata documents, subject to inspection, subject to insurance and a few others. Don’t be hesitant to include the subjects that work in your favour, subjects that would allow you to perform due diligence. I would especially recommend to carefully read strata documents if you’re buying a strata unit. And don’t be afraid to ask many questions. Pay attention to potential or current problems with the building and make sure to review insurance information.
I hope you will find those tips useful. Feel free to share this post with anyone who you think will find it useful. And good luck with your search.
If you’re in the market you might be interested in my monthly real estate newsletter. Here is a link: https://www.myvancouverproperty.ca/insider
Thanks for reading:)