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Buying in a Seller’s Market – 5 Strategies for Success

Buying in a Seller’s Market – 5 Strategies for Success

By Kathy Schmidt, Broker/Owner, Schmidt Realty Group Inc.

STRATEGY #1: Have a strategy!

Starting the house hunting process without a strategy is a surefire route to buyer burnout and disappointment. It often leads to “next year syndrome” where buyers decide to step out of the market, hoping it will be better next year. It might be… or you might miss out on a year of living where you want to and building equity in your own home. Like anything in life, if you want to get somewhere, you’ve got to plan your route.

STRATEGY #2: Understand the process.

Buying and selling real estate is far more complicated than ever. Understanding your rights and responsibilities as well as the legalities involved makes it a lot easier to navigate the process. Knowing what comes next brings peace of mind and helps you make decisions about what you want to achieve and how you can get there. Understanding the components of an offer and how to write a strong one is vital in this market. And being aware of the dynamics involved in a multiple offer situation ahead of time will put you in a solid place to make an informed choice should you be facing competition for your favourite home. It would be impossible to win a game of chess if you didn’t know the rules. How can the players legally maneuver on the board? What are some typical maneuvers your opponent might make? Buying without understanding the process is like playing chess blindfolded! Taking the time to sit down with your agent to review the entire process will give you a big step ahead of other buyers.

STRATEGY #3: Clarify! Clarify! Clarify!

Now that you understand the process, it’s time to gain knowledge about your market. There are hundreds of markets in the Edmonton area. From acreages near Devon to downtown lofts to 1960’s bungalows in Ottewell… every market has its own pace and level of competitiveness.

Price Range + Place/Neighbourhood + Property type/condition/size = Your Market.

We call it the 3 P’s at Schmidt. It’s our unique proprietary approach to helping you figure out where you can get the most for your dollar based on where you want to live and what type or property you want to buy.  It’s a fun and surprisingly fast exercise that will leave with you a deep understanding of your specific market… which means you’ll be able to move quickly (and intelligently!) when the right property comes up.

STRATEGY #4: Gain market knowledge.

This next one might surprise you! Seeing homes without the intention of buying one can be incredibly helpful and is something we encourage initially. In our current market, if you viewed 8 houses on a Saturday there’s a good chance that at least half of them will be pending or sold within a week or two. Having seen the properties in person and then finding out what they sold for provides buyers with an invaluable understanding of real market value that goes way beyond what can be gained from scrolling through on their own. Viewing those homes with an agent and discussing the pros and cons of each gives our buyers a much clearer idea of what their dollar will buy them and sets them up to write a smart offer when the time comes.

STRATEGY #5: Write to win!

It can be stressful to find out that the home you’re going to write an offer on has other buyers writing offers as well. While there’s no way around that, there are 2 ways we recommend approaching it.  Walk away or write to win!  Walking away is a reasonable option if the property is good but not great compared to your goal. It’s also reasonable if you’re looking at the top of your price range and you don’t have the option to entice the seller with the higher offer. This raises another important point … don’t look at homes that are priced at your maximum purchase limit!  Chances are in today’s market you may find yourself competing, and with 45% of single-family homes in Edmonton selling for 100% of list price or more, if you can’t write above list price you will often lose out in a competing situation. Some listing agents and their sellers strategically price a property below market value to attract a lot of buyers and generate competition. If you see that home and think it’s the one for you, list price won’t get you the keys. For example, a home listed at $429,900 recently sold for $461,000. Without market knowledge you’d likely think that $429,900 is what the house is worth. If you’d taken the time to focus in on your market with your agent, you’d have recognized that this house was probably worth closer to $450,000 than $425,000.  The other thing to keep in mind is this… if you “throw your hat in the ring” at list price on a home that you and your agent determine is priced lower than the market will likely bear, all you’re doing is creating more competition and driving up prices in your market.  So, unless you’re prepared to write to win, you’re better off walking away.

While this can all sound overwhelming, it’s important to remember that hundreds of buyers are successfully purchasing homes in this market. And while 45% of single-family homes sold for 100% of list price or more, that also means that 55% sold for less than the asking price.

In the end, your best strategy for success is to partner with a REALTOR® who will help you understand the process and the market, help you to clarify your goals, and strategize with you to write a winning offer on the right property when the time comes. At Schmidt, we’re experts at educating our clients and supporting them to make smart real estate choices. If that appeals to you, please reach out! We’d love to help you find your dream home!

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