Buying Kelowna Real Estate in a Sellers Market

In the Central Okanagan Real Estate zone this December, new listings decreased 11% and unit sales increased 33% compared with this time last year (stats here). This has been a relatively consistent trend over the Fall and Winter of 2013 with inventory dropping and sales increasing. This trend shows our real estate market “re-balancing” after years of stagnation and suggests that we are moving toward a Sellers market.

Given that Buyers have “ruled the roost” for so long I thought I was important to revisit some important things for Buyers to remember as the market momentum picks up:

  • Get pre-qualified, talk to your Mortgage Broker first to lock in a rate, and know what you can comfortably afford. Interest rates will rise; an early rate hold in a fast rising market can save a Buyer hundreds of dollars on a monthly mortgage payment.
  • Negotiations will have a sense of urgency in a Sellers Market, so do all your homework first (before you start viewing any homes in person):
  • Get your REALTOR to start a “Activity Alert” for you for all relevant listings in your top neighborhoods – this will give you a sense of what the homes are selling for and how fast they are selling;
  • Have sufficient funds in the bank for down payment, moving and closing costs (ideally about 9-14% of your intended purchase price being 5-10% down on the home, plus 2% estimated moving and 2% estimated closing costs)

 

  • Negotiate on price, but leave sufficient time for due diligence;
    • Due Diligence is the process of “kicking the tires” on a residential property and looking at the quality and suitability of premises. No matter how intense the negotiations are, Buyers should always leave time and have subject conditions in place to:

i.     Finalize a Mortgage Commitment;

ii.     Do a Home Inspection;

iii.     Review the Land Title with a Lawyer;

iv.     Review the Strata Documentation (if applicable);

  • Many negotiations will be competitive, and a good, experienced REALTOR makes all the difference here, but remember:
    1. It’s okay to “lose” on a house if you are not 100% comfortable with the deal, “winning” a competitive bid is not like winning the hockey game, its “winning” the right to pay for an asset for the next 25 years of your life.
    2. Its way easier to find another good house than it is to find a good spouse… yes I am serious… there are lots of good houses, there are lots of good neighborhoods, seldom is there only “one house”.
  • Final point: Don’t assume the good times will last forever. Lots of people learned this lesson the hard way in 2008 buying pre-sale contracts they could not afford. Real estate is not considered to be a “liquid asset” and you cannot simple sell it with a click of a button. If you sign a real estate contract, plan and expect to close the deal.

Written by Kelowna Real Estate Lawyer Peter Borszcz

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One thought on “Buying Kelowna Real Estate in a Sellers Market

  1. Pingback: Buyer’s Market, Seller’s Remorse; Can a Seller back-out? | BC Real Estate Law Blog

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