When buying a Mississauga condo or house it is important for buyer’s expectations to be realistic. Especially in a climate where inventory may be lower and demand is high. According to the Toronto Real Estate Board, sales for Mississauga from January to March have had an average selling price to listing price of 99% and be on the market for an average of 25 days. Buyers should expect to be in a best case situation to pay closer to asking price and in a worst case scenario be in a bidding war and pay over asking.
How to be prepared to buy a condo or house in such conditions? Buyers need to be prepared as much as possible. I recommend having a preapproved mortgage already set by the time buyers start their search. Taking into consideration buyers will probably like a property other buyers will like. It’s smart then to look for houses 10 to20 thousand below their maximum preapproved amount in case they have to go over asking price. With condos as there is more inventory I would say it’s safer to go to maximum, but don’t be surprised to get into a bidding war for the pretty ones.
Recently I showed a property to a first time home buyer. This was a detached house which needed lots of TLC and money to make respectable. At the time of showing I counted no less than 6 agents showing this property at about 6 pm on a Friday evening. The average selling detached house price in this area is around 800 thousand dollars. The asking price for this house was 450 thousand dollars. My client wanted it at 350 thousand dollars because of all the work he would have to put into it but he didn’t like it enough to put in an offer. The next day this detached house had fetched 24 offers to buy by time I checked at 6 pm. It ended up selling for close to 100 thousand above asking.
Lately listing agents have started to ask all buyers to have certified cheques with a specific dollar amount to be included at the same time as the offer is made and accepted. I know of situations where buyers with higher offers have lost in a bidding war to lower offers just because they were not prepared to give the deposit as per seller’s request. Buyers must have deposit money liquid meaning the monies are not tied up in RRSP’s, GIC’s, stuck overseas etc…and be available immediately. Take note of special instructions like having deposits ready upon acceptance.
Buyers who don’t put in the effort to find out if they qualify for a mortgage and shop within their means will find it very hard to be a winner in this game and only have frustration. The Mississauga real estate market is fast paced and only the strongest, realistic and most prepared buyers come out on top.
By Todd Lee
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