My spouse and I have moved twice in the past nine months, and four times total since 2012. It’s been a stressful time but we feel we are making the right choice and have learned a lot about the state of today’s real estate market.
Searching for a place to live in a seller’s market, like the GTA, can be a grueling and heartbreaking experience. Everything seems out of your budget and the places that aren’t get snapped up before you even have a chance to go look at them. When you finally are able to put an offer on the house, you find yourself being outbid by five other competitors.
What gives? While in no way do I consider myself to be an authority on real estate, I have been through several moves in a challenging buyer’s market which has introduced me to a few tactics.
Before you give up and contemplate moving into a cardboard box until the situation improves, consider the following options:
Rank Your “Must-Haves”
You can’t have everything. There, I said it. Now that that’s out of the way, make a list of the things that are important to you in a house and rank them from most to least important. It’s not going to be easy. Inevitably you will have to ask yourself some hard questions.
Private backyard or en suite washroom? Bigger house or shorter commute?
Acknowledging the tradeoffs and being firm on what’s most important can help keep you from waffling when you find a potential but not-quite-perfect house. This is critical in today’s market because you don’t have time for soul searching when deciding to buy a property.
If you aren’t willing to sign on the dotted line within hours of seeing the place, you’re going to have a bad time.
Consider Reserving a New Build
The obvious con to this option is the timeframe involved. Buy a house that isn’t built yet, and you’ll be waiting a couple years for it to get done, and then spend the first several months living in a virtual mud pit/construction zone. But if you look at the big picture, there are some major advantages to this.
First, there’s less competition. Get in the presentation centre the day they release the floor plans and you’ll have your pick.
Second, new builds can be a little bit cheaper than buying a resale, at least in this market. Just don’t get suckered into buying the outrageously expensive upgrades. Be patient and hire a contractor to put in upgrades after the fact.
Look at Leases
There are a couple good reasons to look at leases. It works well as a temporary measure if you’re planning on buying a new build.
As well, with the housing market the way it is, it may not be the best time to buy right now. For years now, economists have been speculating on the GTA’s “housing bubble” which will inevitably burst.
There’s a ton of conflicting opinions on this, and it may never happen, but how much would it suck if you just took on an enormous mortgage only to have the market crash the next year? You could be stuck with a debt that’s larger than your house’s value. The last time this happened in the 80s, it took a decade for the market to recover.
Or, what if interest rates finally rise within the next five to seven years and you can no longer afford your monthly mortgage payment because of the interest?
The other thing about leases is that there’s always a chance the owner of the house might be willing to sell instead. Investigating this avenue could be advantageous because you’re less likely to get into a bidding war if the house isn’t listed for sale online.
As I said, I’m not an expert by any means, but these are just a few strategies we’ve found helpful the past few years.
Do you have any great house-hunting tips? Share in the comments!