The last year or so has been a boisterous seller’s market, and forecasters are predicting that 2017 (and maybe 2018 as well) will continue to be sizzling hot for sellers as well.
While sellers may rejoice, knowing that their house is unlikely to sit on the market for too long – or that they will likely have to accept any offers below asking, if priced right – there are still steps sellers must take to ensure their efforts are not in vain.
Both sellers and buyers should do their research when looking at real estate professionals (brokers, agents, etc.) rather than simply hiring the first they find. The right real estate professional can be extremely advantageous, especially while navigating a seller’s market, but how do you know they’ll be right for you?
Fully vetting a real estate professional may include checking their references, visiting the RECO website to confirm their registration, looking up their online profiles (LinkedIn, Facebook, etc.), and looking for web reviews.
When you have the list narrowed down, interview your top 3 or 4 candidates to ensure a good fit. Get everything – services, prices, incentives, etc. – they are offering explicitly stated in writing for easy comparison.
Know What You’re Signing
Before signing anything while conducting your search, including signing anything provided by your real estate professional, know exactly what you’re agreeing to. Make sure every clause is explicitly clear. If anything is unclear, ask questions. If you’re still unsure, it may be wise to seek independent legal advice for a second opinion.
Don’t Get Overconfident
Just because it’s a seller’s market, don’t think that you can get away with not taking the normal selling steps. You still need to consider staging, cleaning, decluttering, and curb appeal. If not considered, they may still slow the sale of your house down.
Start Looking First
In a seller’s market, your home may not need to stay listed terribly long. That means you may find your house sold long before you’ve found a suitable replacement. To avoid feeling rushed and forced into buying a home that isn’t what you desired, start looking for your new home and only list your home once you’ve found something in the market you like.
Try to get a line of credit based on your home equity or a loan so that you’re able to buy your new home before selling to further reduce any feelings of being rushed. If you can’t get a line of credit or loan, make a competitive conditional offer or try to negotiate flexible closing timing with your buyer.
A further way to avoid feelings of rushed is to look into renting. You could either rent out – turning your existing home into a rental while buying a new home – or moving into a rental rather than purchasing a new home.
If considering turning your home into a rental, just consider how a mortgage may come into play. Will you be able to find a renter who is willing to pay more than your current mortgage payments? Is it financially secure for you to have two loans ongoing at the same time (if you need a mortgage for your new home)?
If you choose to become a renter rather than a buyer, you’ll be able to pocket the profits from the sale of your home and save it for when you’ve found something you like (or for when it turns into a buyer’s market). This may also be a good option if you’ve already sold your house without finding another that you like.
A bidding war may be many seller’s dream, but remember that you have many options. You can accept the highest offer; negotiate with one offer and reject the others; negotiate with one and put the others on hold; or reject them all. Speaking with your real estate professional will help you make the best decision when choosing.
There are a few things to keep in mind when finding yourself in a bidding war. First, remember that those you choose to negotiate with may not be able to offer any higher, and the other options you tabled in the meantime may have moved on to other houses. Second, in Ontario, you must disclose the number of offers you’ve received to anyone who has submitted a written offer, but that’s all you disclose. Any details contained within the offer must be kept confidential.