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First Time Homebuyer? Here’s What You’re Up Against in a Seller’s Market
If you’re a first time homebuyer in Ontario, you’ve likely heard the term “seller’s market” tossed around – and felt the effects of it firsthand. But what does that really mean, and more importantly, how does it affect you?
In a seller’s market, demand for homes exceeds supply. There are more buyers than there are listings, giving sellers the upper hand. For first time buyers, this can feel like trying to win a race where everyone else has a head start. Here are some of the most common challenges you might face and what you can do to overcome them.
- Fierce Competition
In a seller’s market, homes often receive multiple offers within days or even hours of being listed. As a first time buyer, you may find yourself competing against seasoned investors or repeat buyers with deep pockets and flexible terms.
Tip: Get preapproved for a mortgage before you start shopping. This not only helps you understand your budget, but also shows sellers you’re serious and financially ready to act.
- Homes Selling Over Asking Price
Bidding wars are common in a seller’s market, and homes often sell for well above their asking price. First time buyers with tight budgets may find themselves priced out quickly or forced to make tough compromises.
Tip: Work with a real estate agent who can help you interpret market value versus list price. You’ll need to decide when it’s worth going over asking and when to walk away.
- Little Room for Conditions
In hot markets, offers with conditions like financing, home inspection, or sale of another property may be passed over for “cleaner” offers with fewer strings attached.
Tip: While removing conditions can make your offer more attractive, it also increases your risk. Talk to your agent and lender to determine what conditions, if any, you can realistically remove without putting yourself in a vulnerable position.
- Emotional Rollercoaster
Losing out on multiple offers can be discouraging. It’s easy to get emotionally attached to homes, only to watch them slip away to higher bids or faster buyers.
Tip: Keep emotions in check and stay focused on your goals. Sometimes it takes a few tries, but the right home will come along.
- Unrealistic Expectations
Many first time buyers enter the market with a dream home in mind, but in a seller’s market, affordability may require compromise. Square footage, location, or features might need adjusting. Tip: Prioritize your must haves versus your nice to haves. A great starter home doesn’t have to be your forever home it’s your foot in the door.
Final Thoughts
Buying your first home in a seller’s market isn’t easy, but it’s not impossible. With the right preparation, realistic expectations, and a knowledgeable local agent on your side, you can navigate the challenges and come out ahead.
