Part of the challenge in the local real estate market is a lack of supply. As you browse through property online through the MLS listings, you’ll notice how fast things are selling. There’s no doubt we’re in a serious sellers market.
As in, there aren’t enough homes available to meet the buyers demand. Why? There are a number of factors you should consider in today’s market. The biggest challenge goes from viewing property online to seeing it in person and actually getting the house.
1. Properties are selling very fast
Here’s the scenario: you see a property online and email your Realtor to go and see it. They tell you one of two things: either it’s already sold, or sellers are holding offers in an attempt to get a bidding war. Read: what is holding offers in real estate. But why is this happening?
There are a few key reasons to explain why we are in a sellers market. Ultimately the issue comes down to a simple market dynamic of supply and demand. We are in a severe imbalance at the moment where there is far more demand (buyers) than supply (sellers). This dynamic causes prices to rise- but why are there so many buyers in Guelph?
- Existing homeowners are using their HELOC (home equity line of credit) to purchase additional properties
- Interest rates are very low so borrowing money is cheap
- Millennials are getting inheritance earlier, bringing new homeowners to market
- Less populated areas are more popular because people have more flexibility with work from home jobs
- Baby boomers are staying in their houses longer which “clogs” the natural transition of real estate ownership
- GTA buyers are “downpricing” to area code 519: selling a more expensive home, buying cheaper and pocketing the difference. This is especially true of Brampton and Mississauga residents moving to Guelph
If you’re seriously considering a home in this market, you need to be prepared to be aggressive. Unfortunately, there are no deals to be had and buyers have little negotiation room.
2. Prepare to be aggressive
This is why it’s especially important to ensure you have your “ducks in a row” before you take the move from viewing property online, to seeing it in person. This includes the very first step: get a mortgage pre-approval.
If you haven’t received a mortgage pre-approval, there is no point in looking at houses. Unless, you’re buying a house in all cash! Having confidence it what your budget and housing price you an afford is the biggest hurdle in todays market.
It’s also important to note that the traditional middle step. Historically people would view property online, then go to an open houses in Guelph. If they’re still interested, they’d either do a home inspection with a Guelph home inspector or just put in an offer. Now, without open houses the leap is bigger. It goes from viewing property online to a private viewing with a Realtor.
Act quickly once you see a property online
In todays market, buyers don’t have the luxury of waiting until the weekend to see a house. When a buyer sees a new property online that they love- they need to move fast. Get to the house the same day if possible! This is especially helpful if the seller is reviewing offers at a date in the future. It allows the buyer time to plan, discuss with their bank and form a strategy.
Last but not least, don’t take rejection personally. Instead, learn from the experience and keep trying. Homebuyers who have been living in persistent seller’s markets know the pain of rejected offers and being “beat”. Don’t get emotional about it.
Working with the right real estate agent helps buyers see new listings as soon as they hit the market, so you can jump on “the one” when you find it.
3. It’s possible to find something “off market”
As a buyer, you’re frustrated and tired of losing out on bidding wars. Maybe instead of looking at property online, there is another option?
There’s no secret to finding properties. Most sellers want the maximum exposure they can get in a sellers market, so they put their property online through the MLS system. Some Realtors (like us!) put it on multiple MLS boards, including Guelph and Toronto. This ensures the maximum views from Realtors who advise their clients.
One thing you can do is to get in touch with your Realtor about trying to find something for you “off market”. Within a real estate agent’s world, this is known as a “pocket listing”. It happens more often in the high end luxury market where a seller wishes to remain anonymous.
If you’re interested in a property in a specific location in Guelph, discuss options your Guelph real estate agents. They may have options to try and find you something. This could include sending out marketing material, talking to their existing database within their brokerage or within a realtor database. However, to set expectations: off market deals are very rare, especially in an extreme sellers market.
Why would a seller sell privately and not put a property online?
There are a wide variety of reasons why a seller would not want to put a property online. However, with a bit of planning, most of these can be mitigated.
- The seller doesn’t want many people coming through their home (this is especially true during COVID)
- They are uncomfortable with the real estate process
- The seller doesn’t want neighbours or the general public to know about the sale
- The home owner has to sell quickly, or in “as is condition”
- They believe they can save the commission costs and still get the same result as putting the property online
The risk of selling off market
There’s risk in anything, but the risk of selling off line or through a “for sale by owner” (FSBO) service is:
- It could take longer to sell
- It could result a lower sale price
- Potential buyers may wonder why you’re not promoting the property online (creates a stigma)
Beth and Ryan wrote an article on this, with goal of selling a home on your own using a FSBO model like Property Guys. For some people, this model works well. For others, it doesn’t. The main motivation for a seller to usually sell offline is to save on commission. However, after all the math is calculated it’s debatable if sellers even save anything.