If you’ve had a peek at Vancouver real estate lately, you couldn’t be blamed if you decided to crawl back in your shell and wait for the bubble to burst and prices to fall.
In reality, prices will likely fall about the same time the sky does (see what BMO experts say about real estate markets crashing any time soon). So if you want to move on with your life plans, it probably makes better sense to employ the following strategies to reach your goals in today’s market madness.
#1 – Figure out your finances
If you’re buying a home, talk to a qualified mortgage specialist to find out what size of mortgage you qualify for. And take comfort in knowing that interest rates are at historic lows and show no signs of rising. Use a mortgage calculator to calculate different variables, like the size of your down payment, the payment frequency and the amortization period.
You need to be crystal clear about how much you can afford and what your payments will look like before you even start to look at properties.
#2 – Set your priorities
Think hard about what you really need, versus what are simply the nice-to-have items you’re looking for. Be very practical about this, and draw up a list. Start with these features:
- Number of bedrooms
- Number of bathrooms
- Style of home (condo, townhome, house)
- Distance to schools
- Transportation options
- Age of home
Everyone’s list of essentials is different, and you’ll likely want to add features or remove some from this list. The CMHC has a good, detailed list to give you more ideas. If you’re shopping as a couple, these are important decisions to make together.
Knowing your must-haves will help you compare properties in an efficient way. You’ll see why that’s so important in a moment.
#3 – Consider your options
Now that you have your list of essential features, you’re ready to assess your options from the classic triangle of money, location and style. Here’s how this works.
If money is no object, you can pick any location or style of home that you want.
If you must be in a certain location (say, downtown Vancouver) but have a specific budget to stick to, be prepared to alter your choice about style of home.
If you have a specific housing style in mind (i.e. a single family house), you may need to consider different communities to find a home within your budget.
#4 – Hire a real estate professional
This may sound self-serving, but you have nothing to lose and everything to gain by having an experienced professional on your side. As the Real Estate Board of Greater Vancouver (the governing body for realtors in this region) outlines, working with a trained and licensed realtor is a tremendous asset at any time, and especially so when you step into an active market like the one we’re experiencing today. Your realtor will:
- stay current with dynamic market trends by reviewing current home sale data from mls listings
- advise on any development plans in the neighbourhood
- review past permits taken out for the property, or past minutes from a strata council
- help you determine an appropriate offer, adopt a sound negotiation strategy and negotiate on your behalf
- guide and assist with the many forms and processes required for your transaction.
As if all that expertise is not enough, you also get it for free. Realtor commissions are paid from the sale of a property, not the purchase. How great is that?
#5 – Prepare to act quickly
The first four strategies all lead to this one. The way things are today, it’s unusual for a property to take more than a week to sell. That’s because there is far more demand than supply—more buyers than sellers. So you need to be super-ready to jump when a home hits the market if it:
- meets your needs (strategy #2), and
- falls within your classic triangle of budget, location and style (strategies #1 and #3)
Most deals are closed in a bidding war so you need to set realistic parameters for your offer—not so low that you lose out on the property, but not so high that you can’t afford it. I work with my clients to confirm “How much are you willing to spend on this? And at what price are you willing to walk away?”
If you have the discipline to follow these strategies for survival in today’s real estate market wars, you'll be well prepared to win the battle on your own terms.