Strategies for both buyers and sellers are changing quickly, as the real estate market in the GTA shifts more dramatically and more quickly than many anticipated. What are the implications for you
3 key strategies for a turbulent market
Dated: June 18 2022
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Strategies for both buyers and sellers are changing quickly, as the real estate market in the GTA shifts more dramatically and more quickly than many anticipated. What are the implications for you as you look to buy, sell, or both in this turbulent market?
For years it seemed to be an unbreakable sellers’ market in the GTA, with bidding wars, no condition offers, and above asking sales being the norm, but that landscape has changed dramatically in just a month or two. And, it continues to evolve quickly. Price reductions are common, as properties sit unsold for longer than expected, bidding wars are far more rare, and buyers are taking the time to investigate properties more closely before jumping in.
With a changing market, strategies for buyers and sellers need to change in three key areas:
· the order in which you buy and sell if you’re an existing homeowner
· timing your purchase in a market of softening prices
· locking in an affordable mortgage in a time of rising interest rates and more stringent stress tests.
Buying or selling…which should come first?
For years GTA homeowners were advised to find their next home and have a firm agreement in place before listing their own properties for sale. With a low inventory of houses on the market and a quick sale of their existing home all but assured, the fear was that if they didn’t buy first, homeowners would have a quickly approaching closing date on their existing home, and nowhere to move to because of low inventory and high prices. That advice has now been turned around.
Pro tip: Most homeowners should now sell first. More inventory on the market, combined with softening prices and an unpredictable time on market before your house has sold mean in many cases you should be selling first. This will let you know with more certainty what your budget is for your new home, and your timing around closing dates. Higher inventory levels mean there’s much more to choose from when we’re looking to find you the next home where you’ll love to live.
Timing your purchase
For those buying real estate as a home, rather than purely as an investment, efforts to time your purchase to get the best price on your new home should probably be secondary to other considerations – finding the right property, and the timing that works best for you and your family.
That said, with prices trending downward and interest rates trending upward, the ideal is for us to get your home looking its best and listed quickly, to avoid any further slide in its value. In terms of your new home, we can negotiate much harder to get you the best price possible, as buyers suddenly have more leverage than they have had in years.
Interest rates & stress tests
At the same time as we’re looking to list your current home and find you a new one, you need to lock in the best rate possible for your mortgage, to try to head off the rate increases which are predicted to continue into 2023. In many cases, a qualified mortgage broker can help you navigate this part of the equation, including stress tests, terms and features.
Pro tip: With your current mortgage rate likely far lower than you’d be able to get today, one thing to talk to your bank about is the option of “porting” your existing mortgage, along with its current rate and features, to your new home. Your bank will be able to tell you whether this is a workable option, but it may save you thousands in interest costs for your new home.
My role is to stay tuned in to the market changes, which are typically emerging 2-3 weeks before you read/hear about them in the media, and to work with you to develop a strategy to get you the highest price possible for your existing home, and negotiate hard for the lowest price possible for your new home. Both of these, while also helping you manage the timing and financing around everything else that’s going on in your family’s lives.
For a more in-depth discussion about the best strategy for you in a quickly changing market, call me at 416-436-7375.
Scott
Scott Watkinson
GreatScottHomes.ca
Royal LePage Real Estate Services Inc.
© Scott Watkinson 2022
Scott Watkinson
Scott has a reputation as a consummate real estate professional, advocate and confidant. “Finding a new home is stressful at the best of times. Scott made the process smooth, fast, and very plea....
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