If you are considering purchasing and selling in today’s market there are a few factors that I would suggest you take in to consideration. As I hear from the bank’s and lenders on a regular basis I felt the need to share some of what the lenders have been communicating.
A couple of lenders have reached out with cautionary tales of multiple deals having collapsed due to current market conditions. Client(s) purchased a home a month or so ago due to the hot real estate market, thought they could sell in no time for over asking which has resulted in a disaster for some.
Homes are staying on the market a little longer which has led to slightly lower sale prices, leading to seller desperation and loss of thousands of dollars on the house sale. I am also seeing appraised values for house purchases and refinances coming in a little low. Below are just a couple of suggestions as to how you can protect yourself.
Before writing an offer on a new purchase, have a Realtor do a market analysis to determine the estimated sale price of your home and how long they think it would take to sell. As they are helping purchasers and sellers everyday, they would have the most accurate information as to what you can expect. Better yet, get more than 1 opinion, some Realtors will set unreasonable expectations to obtain your business.
Get your house ready to list before purchasing another house. Put on that fresh coat of paint, de-clutter and get your home in optimal sale condition. I am finding a lot of sellers are purchasing while not even having the house they live in ready for sale. Things are still moving pretty quickly, this will give you the best opportunity to get your house on the market quickly.
Get a pre-approval up front so you know exactly what you can afford to purchase. I wouldn’t recommend you do any of those online quick mortgage applications as the information might differ from what we can actually use. Personally I would do an application, request / review your documentation and provide you with very accurate numbers as to what you can qualify for.
Plan for a worst case scenario. If you end up having to accept a lower offer than anticipated, be sure you can qualify for a higher mortgage amount, or you could plan to take money out of savings to cover the shortfall. Remember to factor in Realtor commissions and the GST from the commissions in your numbers.
Have a co-signer in your back pocket just in case. Nobody wants to have a co-signer, that said, if you were to line up a strong co-signer, then you wouldn’t be in a predicament should you decide to hold on to your sale property in hopes for a higher sale price.
If you think this information could help out a friend or a family member, I would really appreciate it if you would forward this email or provide them with my contact information. I will look after them as if they were a friend or family member to myself.
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