Tag Archive Home Buying

‘Sell before you buy’ is the new housing market battle cry


It’s spring, but the real estate market in much of Canada has yet to exit hibernation.

Home sales in Metro Vancouver for the month of March plummeted to the lowest level since 1986, according to the Real Estate Board of Greater Vancouver. Activity in Alberta and Saskatchewan was more than 20 percent below its 10-year average for the month, the Canadian Real Estate Association (CREA) said. In Toronto, sales volumes were flat.

Granted, there are still signs of life in some parts of the country. Sales in Quebec and New Brunswick, for example, were well above average.

But many Canadians who need to sell a house this year will likely meet unfamiliar market conditions — those of a slow-moving housing market. Real estate agents, meanwhile, are dusting off their playbook from a decade ago, before the housing craze began.

So what does it take to sell your house in these conditions?

Curb your price expectations

The first step to get your home sold in this kind of market is to think hard about your pricing strategy.

In Vancouver, where the April housing market is looking a lot like March, real estate agent Steve Saretsky says buyers should price ahead of the market.

There were less than 1,800 recorded transactions in the Greater Vancouver area last month, CREA numbers show.

“If you want to be one of the few houses that sell, you have to set the market, not react to it,” according to Saretsky.

Given the current downward price trend in the city, that means a home that may be worth $1.4 million today may have to be priced at $1.375 million he said.

Know that the spring housing market isn’t everything

Many people believe the best time to put their home on the market is somewhere between March and June. That’s understandable since the spring is when most buyers start house hunting, said Romana King, director of content at Zolo.ca, an online real estate marketplace. The common wisdom is that parents, in particular, are keen to seal a deal by the start of the summer to be able to resettle the family in time for the start of the school year in September, she added.

The spring is often when you should list your home if you want to sell it fast, according to King.

But if you want to sell a home for top dollar, you’re not necessarily selling it the quickest,” she added.

When Zolo analyzed housing transaction data going back around 15 years in both Greater Vancouver and the Greater Toronto Area, it found that there was often a price premium for sellers who listed in the fall. Your home may remain on the market for longer but net you a higher offer in the end, King said.

King also cautioned against reading too much in some of the larger estimates, like Whistler’s $250,000 premium for April listings. Those are areas that have seen significant volumes of new buildings added to the local housing supply over the past decade. Newer homes tend to sell for more so that can skew averages, King said.

‘Sell before you buy’ is a thing again

Some agents are advising some clients to sell their home before they commit to buying a new one.

These days, the market for sellers is “a bit less predictable” than it has been in the recent years, Pasalis said. People who buy first are typically under pressure to sell quickly so they can free up cash to finance their new home. That means “they don’t always have the luxury to be patient with the marketing of their home,” he added.

Typically, selling first makes sense if you’re in a buyer’s market, King said. When buyers have the upper hand, selling is the difficult part. Vice versa, once you’ve cleared that hurdle, finding a new home should be relatively easy, King noted.

Her rule of thumb is to sell before you buy in a buyers’ market and buy before you sell in a hot market that favours sellers. A balanced market is always a bit of a toss-up, she said.

But figuring out what market you’re in requires some legwork, she cautions.

“Work with your agent to determine which kind of market are you working in for your particular property [type] and neighbourhood,” she said.

And keep in mind that if you’re changing neighbourhood or transitioning from, say, a house to a condo, the conditions of the market you’re selling in may be different than those of the market you’re buying in, she added.

Longer closing times and conditional offers are back

If your plan is to house hunt only after you’ve accepted an offer on your home, you may want to make sure that you can find and take possession of your new place before you lose ownership of your old property, King cautioned. This means the closing time — the period between when an offer is accepted and when ownership is transferred — needs to be longer on the property you’re selling than on the property you’re buying.

Closing times as short as 30 to 60 days have become the norm, but in a slower housing market, there’s nothing wrong with telling a buyer that you’re going to need 90 to 120 days, according to King.

If you’re buying first, consider submitting an offer that is conditional on you being able to sell your home. In a sellers’ market, such conditions may scupper the deal. But that is less and less the case in a slow market, according to King.

“In the last 10 years these conditions disappeared … because everyone was rushing to try and get into the market,” she said.

Now, though, she added, they’re making a comeback.

De-personalize your home and punch up your curb appeal

If you’re showing the house while still living in it, you and your agent won’t be able to stage it the way you would if you had moved out. But you should still de-clutter and de-personalize your space, according to King.

Ideally, your home should be a “blank canvas” in which other people — your prospective buyers — can see themselves living, she said. Your job as a seller is to enable that fantasy.

That means things like family photos, children’s artwork pegged to the fridge, and knickknacks from your trip to Mexico that only mean something to you have to disappear, King said.

And creating a blank slate may also mean repainting your walls white — or some mainstream-trendy shade of light gray, she added.

Another kind of sprucing up you should invest in if you’re selling a house, rather than a condo, is improving your curb appeal, King said. Things like hiring a gardener to fix up your front yard or filling up the cracks in your driveway pay off, she added.

What to do if your home isn’t selling

If your “for sale” sign has been sitting on your lawn for a while with no sign of the dream offer you were expecting, there are usually two main courses of action. One is reducing your asking price, the other is re-listing at a later date.

If you’re getting few showings and no strong offers, “that’s usually a good clue that the issue may not be your list price, but rather the current market conditions,” Pasalis wrote in a recent blog post. If you can hold out for a few months, it may be a good idea to postpone selling until the market picks up.

But if you realize your pricing wasn’t realistic, you should look at reducing your ask “sooner rather than later,” Pasalis told Global News.

Most sellers are inclined to do so only gradually, but a series of small reductions of $10,000-$15,000 won’t cut it if your price is significantly out of whack, he said.

At the end of the day, Saretsky mused, “you’re only worth what you sell for.”

“Everybody wants to get a little bit more than their neighbour did. But if you can keep your emotions in check, that’s going to serve you well.”

Lethbridge Mortgages - Buying a home

Are You Really Ready To Buy A Home?

Buying a home is a big step in a person’s life and there are many factors that must be considered before you can sign any agreements and move into your new space.As Lethbridge mortgage professionals, the team at Mortgage Worx Inc. – The Mortgage Centre deal with many first-time homebuyers on a consistent basis and are able to help clients evaluate whether or not they are truly ready to buy a home.

With interest rates experiencing some favourable lows over the past year, many first-timers are eager to enter the homebuying market. However, taking advantage of good interest rates shouldn’t be the main reason you decide to purchase a home.

There are many reasons why you may or may not be prepared to purchase a home and our team has identified some of these for you to review before taking the plunge.

Know what you can afford

This applies to a down payment and your overall mortgage amount. Before speaking with a mortgage broker or agent you should have a general idea of how much money you can contribute towards a down payment on a home.

As of February 2016, the minimum amount for a down payment on new insured mortgages increased to 10% for part of the home price for homes above $500,000 while those under $500,000 stayed at 5%. Typically, the majority of people choose to pay a down payment of 20% as anything under this amount requires the purchase of mortgage default insurance.

A Lethbridge mortgage broker at The Mortgage Centre can help you determine how much you can afford to put on a down payment as well as how much you can afford to pay monthly towards a mortgage so that you’re not breaking the bank right off the bat.

Don’t purchase based on anticipated income increases

Some homebuyers anticipate a future promotion or hike in their annual income and therefore believe they can buy a more expensive home. This is something to avoid doing for obvious reasons.

Not only do expected promotions or new job hiring’s go as planned, but there is also the potential for career changes. Things can change quickly and this is why you should never purchase a home driven by the expectation that you will be making more money in the future and can thus afford to get a higher-priced home.

You plan on staying for awhile

Purchasing a home is a big deal and a serious process, so if you’re not planning on staying at a home for at least 5 years, it might not be the right time to purchase. There are many people who purchase homes and end up moving within 5 years, however it’s wise to buy a lower-priced home that you feel you could sell quickly if needed should you not envision staying in it for a long time.

Set money aside for unexpected costs

Plumbing repairs, a broken air conditioner, a new roof and faulty electrical units. These are just some of the things you can expect to repair or replace if you stay at a home long enough.

In the case of such events occurring, having an amount of cash set aside strictly for these unexpected occasions can help you in the long run. This will undoubtedly bring you peace of mind and limit any stress caused by these events without throwing a wrench into your monthly budget.


By considering these factors, you should have a better idea as to whether or not you are actually ready to buy a home.

As we mentioned, the purchase of a home is a big deal. If you’re considering buying a home, talking with one of our Lethbridge mortgage professionals can help you get an advantage and ensure you are being looked after properly. Contact us today to learn more on how we can help with the homebuying process!

Source: http://www.investopedia.com/articles/mortgages-real-estate/10/ready-to-buy-house.asp

Source: http://www.fcac-acfc.gc.ca/Eng/resources/publications/mortgages/Pages/BuyingYo-Acheterv-10.aspx