Searching for the perfect home can become exhausting, especially when you know there are multiple offers being submitted by other potential buyers and further realizing with each attempt at another property your offer may not get accepted. It’s frustrating not knowing what the magic number is going to be and potentially having to take sudden risks like going over your budget.
If this struggle continues for long, you may feel annoyed, discouraged or even decide it’s best to sit out on home buying altogether.
In reality, buying a home should be a fun experience and one where you can happily search for your dream home ––a property that meets all your expectations. But when it’s a seller’s market, you may end up finding this experience overwhelming and sometimes, a complete nightmare.
So, how can you avoid the headache of buying a home in a heated real estate market and still have an enjoyable and successful experience?
Understand Your Maximum Purchase Price
One way that almost ensures you will run in a complete circle during a home search is not understanding your bottom line. It’s easy to use an online mortgage qualification tool and assume you know the maximum purchase price you qualify for but using this method can seriously hamper your chances of successfully purchasing a home.
Online qualification tools are not personalized and only run a generic calculation without factoring in your employment income, credit score and monthly liabilities. If you rely on this method alone to determine your bottom line, you may find you will have to abandon your offer to purchase in the end because you may not actually qualify.
Car loans, student loans, lines of credit, etc. can all reduce your purchasing power and therefore must get included in your pre-approval application to avoid disappointment.
Also keep in mind that using an online qualification tool may even underestimate your purchasing power, causing you to miss out on buying a property more suitable that costs more.
When you get an official pre-approval which is signed off on by a major financial institution, you can be confident in your bottom line. You will narrow down the price points you can afford and customize your home search, which increases your chances of finding the right home and having your offer accepted.
Speak to your mortgage broker about the property you plan to put an offer on.
Mortgage brokers don’t just offer pre-approvals to help increase your chances of having your offer accepted, they also offer guidance on each potential property you want to put an offer on.
Property taxes vary depending on the property and that can add or take away from your pre-approved mortgage amount. For example, if property taxes end up being lower than what was estimated, you may qualify for a larger mortgage. On the flip side, if property taxes are more, this can reduce the amount of mortgage you qualify for. Again, the more you narrow down your bottom line, the more successful you will become in finding the right home. Mortgage brokers can help you.
Make sure you disclose ALL income to your Mortgage Broker.
When trying to determine the perfect price point through a pre-approval, it’s important to disclose all of your income. You may not know that the Canada Child Benefit, for example, is an acceptable form of income and can help you qualify for a larger mortgage. Be sure to learn about all the forms of acceptable income to increase your chances of home buying success.
Write a heartfelt letter to the seller and attach it to your offer.
At first, you may think that writing a sentimental letter to the seller about why you are the best purchaser for their home is a little corny, but when there is fierce competition that seems to focus on price, sometimes the reasons can overcome the dollar amount. Many sellers get attached to their property. They like to feel that the person buying their home really cares about it and will treat it well. Try writing a letter about the reasons you love their home and attach it to your offer!
Don’t give up.
It is difficult even for real estate gurus to predict the real estate market with accuracy, so don’t let failed offers discourage you. Yes, it can feel hopeless at times but the real estate market moves in cycles and it can flip to a buyer’s market on a dime. Just think, there are many homes that meet your criteria in the queue to be listed, and you WILL find the right one for you!
Do you have mortgage questions?
Please feel free to call or write.
Sarah A. Colucci, Mortgage Agent Lic. M14000929
Mortgage Edge, Broker 10680
Direct: (647) 773-4849
By: Sarah Colucci
Senior Mortgage Agent, Lic. M14000929
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Sarah A. Colucci, Mortgage Agent Lic. M14000929
Mortgage Edge, FSCO Lic. 10680