If you're one of the many home seekers in Metro Vancouver with your sights set on purchasing a condominium for yourself, being prepared beforehand is the best strategy to achieve your goals. As you begin your exciting journey towards home ownership, it is imperative that you know what you are stepping into.
Over the past three years, it has become commonplace for listed properties to be marketed in such a way that a multiple offer situation, or more casually, a bidding war is induced. While some buyers sit on the sidelines and avoid this type of home purchasing environment, many have learned to embrace it and as a result have had success finding their dream home.
So what are the steps leading up to your offer going in that you can take to prepare and safeguard yourself?
First and foremost
Get pre-approved fora mortgage. I cannot stress this enough. In fact, I've written about it before: Get Your Pre-Approval! Simply put, a pre-approval is an amount stated by a bank or mortgage broker that will give you an idea of what you can afford. Knowing this is invaluable when it comes time to searching and making an offer. It is also prudent to stay a little under this budget when searching for homes to reduce the chance of running into mortgage qualification difficulties.
Determine Your Criteria
Location and age of a building are the two main determinants of price point. If your budget allows for it, aiming for newer property is a great idea. New builds provide a warranty covering various components, as well typically yield the highest levels of appreciation. If not, having a REALTOR® who has done research and a good sense of which buildings in the areas you like are well maintained can be a helpful resource. Targeting a building that shows signs of being problem free for as long as possible will help alleviate the fact that a home inspection may not be an option in multiple offer situations. *Disclaimer: I always recommend getting a home inspection, however, evaluating the pros and cons of having this as a subject sometimes leads to the unfortunate decision of foregoing it. Given the pace of sales for some properties, buyers are often left with a choice between a home inspection or having a competitive offer.
Viewing Schedule
The property that looks like it's your next home has hit the market at a seemingly attractive price. If the home is following the traditional schedule of viewing to attract multiple offers, you can expect that showings for this home will only be available on the Wednesday or Thursday evening after it's been listed, as well as at two open houses, typically from 2:00PM - 4:00PM on Saturday and Sunday. Given that other showing times may not be available, scheduling time to see the property should be a priority.
Documents, Documents, and more Documents
After viewing the home you want, you've decided to write an offer on it. At this point, you should have access to the documents pertaining to the building and suite. Within this extensive package, you'll find items such as: bylaws and rules for the building, engineers reports from studies conducted on the building, a Property Disclosure Statement outlining information regarding the state of the property disclosed by the owner, minutes from strata council meetings, financial statements, and more. These documents are vital and the importance of reading through them cannot be overstated. Within the documents, you'll find out the status of the building and get a good sense if the strata is proactive in maintaining day to day operations. A diligent REALTOR® will read through these documents on your behalf and ensure that they are looking out for your best interests. Nevertheless, as a property is generally the most expensive purchase in one's life, it is highly recommended that you read them as well.
The Offer process
After the weekend, you can expect the sellers to have set a specific offer deadline, usually the evening of the following Monday, Tuesday, or Wednesday. This means that any interested parties must have their offer in by the specified time at which point the seller will review all of the offers with their agent.
how do i keep my offer competitive?
Unfortunately for buyers, it has become very common to be competing against 3 or more offers. In order to keep yours on the top of the pile, having minimal or no subject conditions will prove advantageous. Reviewing the above, buyers are able to mitigate risk by: having read all documents in advance to ensure they are buying into a sound building, being pre-approved for a mortgage for an amount above their offer price, and being thorough when viewing the property for any visible defects or causes for concern. If you are opting to submit a subject free offer, enclosing a copy of your deposit will also strengthen your offer. Finally, it is important to keep in mind that sellers are often advised to underprice their homes in anticipation of offers above asking price.
Although the purchase process can be stressful and a little more rushed than ideal, putting your best foot forward by doing the legwork beforehand will go a long way to achieving a successful property purchase. As well, it is important to remember that you are not alone. A good REALTOR® will assist in guiding you through the entire process.
If you're looking for guidance through the buying process or want more information, you can email me anytime at adil@adilkhimani.com.
Thank you for reading,
Adil