3 things to know if you're buying in Ottawa in 2019
You may have heard it is a wild time to be a buyer in Ottawa’s current real estate landscape.
Sure, it’s intimidating but it’s no reason to put off buying if you feel ready.
I’m going to walk you through exactly what to know when buying a house in Ottawa right now, bit by bit. Sit back, grab a cold brew and let’s get into it.
Pre-approval is a must
For the average buyer, there’s no reason to start your search until you are pre-approved.
This comes down to two reasons:
1. Your budget is arbitrary until you’ve spoken with a broker or lender.
There are certain aspects you may not consider when setting a budget that lenders certainly will. Knowing what you can put forward as a down payment and monthly payments is a great starting point, but your true “budget” isn’t set until lenders have considered all four major financial components.
Looking at new homes based off your proposed budget without a pre-approval can often lead to searching outside of your range and developing unrealistic expectations\ for your purchase.
2. You’ll miss out on your dream home.
Buying a house is a major decision, but you don’t have long to make it. If you start your search pre pre-approval, you may find your dream home too soon. By the time you start talking to a mortgage broker or your bank, offers will be placed and you’ll be far from a consideration.
Prepare to be flexible
High expectations are a given: your first home is a major purchase. Probably the biggest one you’ve ever made.
There’s a difference between high expectations and unreasonable standards.
Being flexible and open minded in your search can help you find the perfect home you may have never seen coming. If you’re set on Barrhaven because you love the suburb life, consider expanding your options to Kanata, Stittsville and Bells Corners. Want to live downtown? Let’s also consider Centretown, Little Italy, and the Glebe.
Being flexible widens your options and open your eyes to places you never would have thought you’d fall in love with. Being flexible also can help make your offer more attractive when the time comes, if you don’t have a set closing date or are open to certain conditions others refuse, you can vastly improve your chances of having your offer accepted.
Multiple offers is the current reality
The real estate market changes frequently: sometimes it’s favourable for buyers, sometimes sellers. Right now we have what you call a sellers’ market. This means the sellers have the upper hand.
So what do you need to know as a buyer?
There are more people looking to buy than there are houses to buy.
This is due to Ottawa’s rising population, the popularity of specific types of homes right now (eg townhouses are hot), and the rising prices of homes. Everyone is looking at the same options.
At any given time, there could be 50+ buyers all looking at the same price range and neighbourhoods with only six houses on the market that match.
Negotiations are not what they used to be
There was a time where you could inspect a house and list the items the seller needs to change as a condition of the sale. That time is not today.
While you can still do this in theory, you’ll have a tough time getting your offer accepted. In April 2019 alone, townhomes on one Barrhaven street were going for an average of $40,000 above the listed price.
This doesn’t mean you won’t be able to land a house or you can’t get an offer accepted at listing price, but there is a lot less wiggle room for compromises on the seller’s end. The simple truth is they don’t need your offer if it has too many conditions because someone else is always offering less demands.
Third time’s a charm
The last and sometimes hardest reality of multiple offers is losing out multiple times before getting an offer accepted. As a real estate agent, I can use some tricks up my sleeve to help make your offer most attractive, but at the end of the day, you won’t always have the capabilities to make the best offer compared to others.
Keep your head up and have faith you will find the perfect home. It can be really disheartening to lose out on multiple offers and feel like each house was THE house, but it just means yours is still out there waiting for you.
Disclaimer: I am not a mortgage specialist and the above should only be taken as loose advice. Please contact a mortgage specialist or bank for formal advice.