Many real estate agents use digital tools to look at home price averages in Canada. That way, they can use trends to negotiate the buying price for a home. Unfortunately, this software has limitations, often lagging several weeks or months behind the true market value. To get the best price possible when buying a home, it’s essential to choose a realtor who knows the housing market personally and sees changes in real time.
1. Considerable Savings on Housing Market Purchase Prices
The price of homes in Toronto can vary widely depending on market trends. Some changes are based on seasonality; homes tend to drop in price over the summer as buyers become occupied with other needs in preparation for fall and winter. Additionally, inflated markets eventually have to burst: The 20–30% increase of Toronto’s market from 2020 to 2021 just wasn’t sustainable.
When you have a realtor who tracks micro-shifts in the market, it can save you a lot of money on a home’s purchase price. Just from February to July 2022, the average price of homes in Canada dropped by nearly 20%, from almost $800,000 to around $650,000.
What would a 20% drop look like in the Greater Toronto area? Instead of paying $1,300,000 for a home, you could snag a great home for around $1,040,000. That’s a savings of over $250,000.
Of course, every market has different prices, but the point is that you can use your money wisely with a real estate agent who knows how trends are stacking up on a day-to-day basis instead of waiting for monthly trends.
2. Increased Negotiating Power for Buyers in the Housing Market
A seller’s market happens when there is too much demand for houses and not enough properties to go around. A buyer’s market is the opposite, when there are plenty of homes on market and sales are slow. In August 2022, Toronto had a buyer’s market for the first time in years.
Any time home sales slow, it’s good news for buyers. It gives your realtor increased bargaining power in terms of the home price, closing costs, financing stipulations, home inspections and other details. This negotiating power is important for getting fair terms for your deal.
Including contingencies in the purchase agreement can make the home buying process more comfortable for you. For example, a home sale contingency gives you leeway to sell your old home before purchasing the new one. This is normally unheard of during seller’s markets, but selling slumps can make your offer more appealing to sellers, especially if it’s the first offer they’ve gotten.
3. More Items From Your Wishlist
Tracking market changes in real time can provide many benefits for your wishlist. First, saving money on the potential purchase price can open the possibility of buying homes that are more attractive for your family. Agents can catch wind of properties that were out of your price range before but that may accept a lower offer now.
Second, as the competition among buyers slows down, you may also have a wider range of properties to choose from. Instead of feeling like you have to pounce on real estate the moment it becomes available, you can check out other properties to get a good feel for what your family really wants. We know the local housing market intimately, and we take the time to understand exactly what our clients are looking for, which are huge factors for locating a property you love.
4. Smart Protection for Your Long-Term Interests
When there’s intense competition among buyers, sellers wield a huge amount of power. In Canada during 2020 and 2021, many sellers had too much bargaining power, acting with a level of entitlement that wasn’t normally seen in the real estate market. Not only did buyers have to make high offers, but many also waived due diligence steps that are essential for house purchases.
For example, some buyers were so desperate to have the winning bid that they waived a home inspection, one of the most fundamental aspects of purchasing a new home. Professional home inspections can reveal significant issues impacting homes, such as safety violations or mold problems that seriously risk your family and finances. Additionally, inspections may be necessary for you to qualify for financing with better interest rates.
When we represent you, we are working for you. Not just to help negotiate the best purchase price; we also look out for your long-term interests, helping you know what steps to take to protect your investment and avoid buying a “lemon.”
5. Less Stress During the Home Buying Process
One of the main purposes of having a real estate agent by your side is to smooth the process of purchasing the home you want. We look out for your needs and let you know when sellers are being unreasonable. Sometimes, the right answer is to walk away from the bargaining table and find a more reasonable seller.
Having our real estate expertise by your side can especially help when it comes to stress. You shouldn’t have to deal with sellers that are leading you on. Our team handles negotiations completely, and we have many contacts with other agents in the area. Sometimes, a friendly chat is exactly what’s needed to convince sellers to accept a more reasonable price point based on market trends.
A good real estate agent should always be happy to answer your questions. If this is your first time purchasing or selling a home, it’s normal to feel overwhelmed by everything. You should never feel embarrassed to ask questions about different terms.
When Is The Best Time To Buy a House in Canada?
Some buyers think they should wait for the housing market in Toronto, Burlington, Mississauga and Oakville to cool further, but that may not be the right answer. If the Bank of Canada continues hiking interest rates, it can end up costing buyers considerable funds for financing, plus make it harder to qualify for a mortgage.
Your best bet is to speak with Jeff Tsuji at Tsuji Real Estate to get a feel for the current housing market. Check out all of your available options right away.