As you may or may not know, Canada seems to be in a major housing crisis. There are homes going as much as 50-100k above asking in regular old neighborhoods. Trying to find a place to live has been nothing but stressful. Not to mention there are many folks who are being evicted due to their landlords selling the properties they have been living in. And apartments around the city, specifically Halifax are going anywhere from 1000+ for a one bedroom. So once someone is essentially left homeless or scrambling they now are finding it hard to find an affordable solution. Especially this is difficult if you have animals as well too.
If you are familiar with buying a house, it really was not this hard when we first bought a home about 8 years ago. You would simply find a home that you think you would like, and put an offer in. The sellers would than come back with a counter offer if they were not fond of your offer. And you would go until the home was inspected and everything fine and than you would be done and over with. There was no usual waiting period or holding offers it was pretty straight forward. Sure, if you were not fast enough there is a chance of losing the home to someone who maybe had finances in order quicker or perhaps you would lost it to someone who did put in a better offer but more likely than not you were pretty good on a home once you picked one you would like.
Fast forward to now, things are completely backwards. You no longer have time to wait and put in an offer. A home is listed on say a Thursday, and by Monday you will know if you are an accepted offer. There is a very short window for viewings and then they typically say close at a specific time and hold offers until 3-8 hours later. After that you will find out if you have won essentially. What you may or may not know is that there could be anywhere from 5-15+ people who are also putting an offer on the same home. Therefore you can no longer ask a few thousands above asking, You need to literally put your highest mac on the table and hope it is the best. You also have no idea what others put on their offers so essentially you are almost for sure going to be over paying for a home. It is a flex on who has the deepest pockets. In Nova Scotia more specifically there has been a lot of out of province buyers from Ontario and Quebec who are purchasing homes leaving Nova Scotians stranded with no where to live.
Essentially the new way of buying a home is in my opinion barbaric. Until the province or bank or whoever steps in to make it “fair” for everyone I don’t think it will let up anytime soon. You have to ask yourself what you are willing to pay for a home. Mortgage rates are so low due to this boom in housing for sale that they even do a stress test where they jump the rates up to 6% in order to see if you can survive the increase of you will end up having to sell again before the bank takes your home. Even homes that are outside of the city of Halifax that are normally going for asking are going anywhere from 60-110k over. What is weird is that there is no rhyme or reason as to what homes will go above asking or what will go slightly above asking. There is specific areas that are more expensive to buy in, ie: Directly downtown or close, Dartmouth or even Sackville which is super weird and never seen before. If the home is renovated you can nearly guarantee that they will be going at least 75k above the asking price. Some homes that we thought would go way above asking didn’t, others that we thought would go a bit above asking flew up to 100k+.
Another tactic that you hopefully know and do not fall for is that there are homes listed far under asking price. This is because they want to see more offers and where people are normally familiar with the market they are likely to be putting more into their offers. The best advice you can do is not to go over your max. Regardless of if the house is worth it or not. Do not go over the max you can do or you risk losing financing because the house is not worth what you paid. Another bit of advice would also be to make sure you have a proper down payment when it comes to buying a home. If not you risk losing financing as well based on the debt ratio that you will have when paying for mortgage payments etc.
And a final piece of advice, If you are able to on whatever website you use to look at homes, favorite ones you like and watch prices. There have been times that I see homes go from sale, to pending, back to sale and they have an increased price. Which suggests that the offers that the seller initially had gotten were too low and instead of putting the house for sale at the price they wanted to they did this in hopes to get more bites which didn’t work.
So where does that leave us? Well, I will be going more in depth about the journey that we took when it came to buying a house. As of the time of writing this we have had an accepted offer, and against all odds it was below asking price. There is a lot of work that will need to be done however we have to quarantine for 2 weeks upon arriving and we will hopefully get the painting done a lot before. I can tell you it is extremely disheartening and stressful to be putting offers on homes (That to be frank, are just not worth that much to begin with) And have them be 30-60k over asking and be denied.
Regardless we have out inspection tomorrow, I will hopefully have an update in the near future once the sale of this home is finalized and I will write up the amount of homes that we put offers on, the prices, and the bids to give you a better idea how crazy the market is. More of the math side of things. And hopefully I can share that the sale of the house is for sure!
Have you sold a home in Canada in this crazy market?
Are you looking to buy a home in Canada?
Let me know in the comments below and hopefully this can help you in your house hunting journey too!
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