Are you house hunting in a fast paced real estate market like Toronto, or Barrie?
Yes, I said Barrie. “Housing activity in the Barrie region remains on track to set a new annual record in 2016, provided new listings manage to keep up with demand through to the end of the year,” said Mike Douglas, President of the Barrie and District Association of REALTORS®. “It’s important for buyers and sellers to ask their professional REALTOR® how to best do business in this changing market.”
According to the Barrie and District Real Estate Association, the year to date average price for all homes sold in their system as of August is up 16.8% with an average price of $429,111 and the year to date average price in the City of Barrie was up 17.3% or $402.640, compared to the average selling price for the first 8 months of 2015. The year to date average selling price for areas surrounding Barrie $460,552, up 15.2%.
It’s been an unbelievable year if you own a house you wish to sell. But what happens to the average buyer? Not to mention, if you sold your house you most likely will be buying another. Barrie is starting to behave like Toronto. I’ve been hearing from my clients about multiple offer situations, high demand and low supply. Houses are being snapped up, as quickly as they are listed. In one case, I heard of a house selling with multiple offers, have the deal fall through on financing a week later, then when it went back on the market a few days later, it received 5 more offers.
The question is….. How do you get your offer accepted when you are in such steep competition? Many buyers are going into the offer situation at the asking price or above WITHOUT ANY CONDITIONS including financing and/or home inspection.
Most are fully aware of the risks. In a situation like this, it is imperative that you visit with a mortgage broker prior to house hunting. You must have some feeling of confidence in your prospect for finding a mortgage well before you make that offer that could be accepted. Should you be the successful bidder, you could be leaving yourself open to consequences should you be unable to find financing and unable to close on the sale. At best you will lose your deposit, at worst you may get sued. Usually there is a string of sales that need to close in succession to yours. As your home is paid for, those funds are used to purchase the sellers’ home, the funds from that sale purchases the next persons home and so on. .
Then why take the risk? Most realtors make their buyers aware of the situation prior to signing on the dotted line. Many feel that it’s the only way to make a purchase! And it might be. So be very careful. As a mortgage agent, I will not advise you to purchase a home without a condition on financing however, I will be able to tell you what your chances are. I will make enquiries to confirm that you will likely be approved for the mortgage you seek, but I cannot make guarantees. Having a good backup plan is important. I will discuss that with you too.
There are consequences for making an offer without a condition on home inspection too.
What happens when you forgo a home inspection? Many home owners are unable to accurately investigate the mechanics of a home. They are unable to assess the electrical, plumbing, or structure to the degree that a knowledgeable home inspector is trained. Home buyers generally do not enter the attic of the home to check the quality of the insulation, check for mould, ventilation, etc. nor would they have the expertise to do so appropriately.
By skipping this important step towards home ownership you may leave yourself vulnerable to any deficiencies in the home and the expense of repair.
Unfortunately, there is no right or wrong but what is important is to make the decision that is right for you, and to know the risks.
A good team of professionals working on your side will advise you of your options paving the way for an informed educated decision.
Calling a mortgage broker or agent with Neighbourhood Dominion Lending Centres is a good start before embarking on your home purchase journey.
Written by Anne Martin