How to Navigate a
As competitive as the market can be, there are still ways for you to find the perfect home and to sell your home - working with an experienced real estate agent who knows how to navigate the market is a great way to start.
How to Navigate a Competitive Market
As competitive as the market can be, there are still ways for you to find the perfect home and sell your home, and working with an experienced real estate agent who knows how to navigate the market is a great way to start.
After all, buying and selling real estate is one of the biggest financial decisions you’ll make in your life – doing your research and consulting with your real estate agent will help you make an informed decision.
Buying a Home?
Have a Realistic Budget
It’s always important to keep your budget in mind when searching for a new home – but in a competitive market it’s crucial to monitor your budget and keep in mind things like closing costs and other extra costs like moving and renovations.
Knowing how much you have available for a down-payment, pre-approved mortgage, and closing costs will help you spend your time productively while searching for homes within your price range.
Understand the Market Value of the Property
When you are searching for a new home, it’s important to do your research and get all the facts about the property to make a decision that is right for you. Doing things like reviewing a property title, researching the neighborhood with all its amenities, doing a home inspection, and reviewing any relevant documentation are all things that will help you learn more about your investment.
In a competitive market, time can be constrained, and you may feel there is not enough time to do your full due diligence. This could be due to many competing offers on the same property or a specified offer submission date.
Before submitting an offer without doing your full due diligence, consult your real estate agent about the associated benefits and risks. Requesting a home inspection before offers are submitted and requesting relevant documentation so you may review them before the offer deadline are both great ways to gain more information.
Understand the Risks of submitting a subject-free offer
One way to make your offer attractive to a seller is to submit a subject-free offer. However, this is a risky option when buying a home. Subjects are included to protect you in case of financing hurdles, home deficiencies, and the ability to sell your existing home securely, among other items.
By removing subjects in your offer, you expose yourself to risks such as unknown defects that would have been found with a home inspection, pre-approved financing that does not get final approval, or changes in bylaws or restrictions of your dwelling. These risks can lead to unwanted consequences, so it’s important to discuss this scenario with your real estate agent before submitting a subject-free offer on a home.
Your real estate agent may suggest asking the seller for a home inspection to mitigate any repairs, reviewing the property title to view any charges, and requesting relevant documentation about the dwelling that might be available. Getting as much information before submitting a subject-free offer and consulting with your real estate agent is the best way to prepare yourself and familiarize yourself with any risks that may need to be addressed.
Know what to expect when working with a Real Estate Agent
Real Estate Agents are here to help you navigate competitive markets and purchase a home that suits your needs. We can help you to:
Determine the type of home
What your budget should be
Provide information about active properties on the market
Providing answers to questions you have about specific homes
Explaining and documenting all forms
Presenting a written offer to the seller
Making sure that you know what steps need to be taken to finalize a transaction
When it’s time to start your real estate journey, know that your real estate agent is there to look out for your best interests and help you navigate a market – no matter how competitive it might seem!
Selling a Home?
Understand the Listing Price
In one of your earliest conversations with a real estate professional, you’ll learn about the different strategies for marketing your home in existing market conditions. In a competitive market, one of the riskier strategies is to list your home below market value, hoping that you will have multiple offers come through and compete for your home.
While this strategy could work, there are times when it could lead to outcomes that make it harder to sell your home and could cost you extra money.
Outcome #1: No Over List Offers
Competitive markets don’t always yield “competitive results” – each property is different due to its build date, condition, location, etc. If you list your home below market value and no competing offers are submitted, it could result in amending your listing price to reflect what offers you are willing to accept.
Outcome #2: Stigmatizing Your Property
Listing your home at a price to create a bidding war could instead result in a negative perception. Potential buyers may think there is something wrong with the home or that something is wrong with the surrounding area, deterring them from even making an offer.
Creating a competition for your home and misleading buyers with an under-valued listing could leave mistrust, deterring buyers who may feel they could be misled in other ways during the transaction.
Outcome #3: Liable for Commission
It’s important to understand the terms of your contract with your real estate agent and the financial implications of the strategy you agree to. While it is within your right to refuse any offer made on your property, even if that offer meets your needs, you may be liable to pay a commission if you receive an offer that meets the criteria (even if not accepted).
Be Prepared in a Multiple-Offer Scenario
Multiple offers can be a common occurrence in competitive markets or for highly-desirable homes as they come on the market. Buyers often look for ways to make their offer more attractive to sellers in competitive markets, hoping theirs will be the one that gets accepted.
Your real estate agent must present and explain all offers and help you understand the benefits and risks of each. This will ensure that you make the best decision for your home sale and get the most out of the transaction.
Understand the Risks of accepting a Subject-Free Offer
When receiving an offer on your property, there are 4 options for you: accept the offer exactly as it stands, make a counter-offer, reject the offer, and ignore the offer. As discussed, in a situation where your property is listed in a competitive market, you could be dealing with subject-free offers that make the transaction much more attractive.
Subject-free offers come with their own set of risks, such as a buyer who has not secured financing or a lack of a home inspection done on the property. Performing transactions with no subjects can be both beneficial and potentially risky – it’s a good idea to seek legal advice and the advice of your real estate agent in each case.
Understand the Role of the Real Estate Agent
Your real estate agent will help you answer all the burning questions you have about the complex process involved in selling your property:
What is the best price to list your home?
What facts must you disclose about the property?
What paperwork will you need?
How is ownership transferred?
How are funds transferred?
What happens to your existing mortgage?
Having the answers to these questions is one great reason why the role of a real estate agent is beneficial to you throughout the process.
Your real estate agent will perform market research and their knowledge and expertise to determine the answers to all these questions and more. Once you understand the process, have a firm understanding of where the market currently is, and understand where your property may fall into the active listings, your real estate agent will ask you to sign a listing contract (service agreement).
This listing agreement will outline the details of the property (including all defects), the terms of the agreement, a general description of the services provided by your real estate agent, disclosure of personal information gathered, as well as the obligations to remunerate and the circumstances in which it will be paid.
As offers for your property begin to be submitted, your real estate agent will present each and explain the benefits and risks of each, ensuring that your property transaction runs smoothly with no surprises at the closing date.
Whether buying or selling real estate, talk to a real estate professional who will work with you through your journey and learn more about how we can help you make an important real estate decision.