In the past year, Montreal has switched from a buyer’s market to a seller’s market. This means more competition, higher prices, and potential bidding wars on available listings. In short, it’s currently easier to sell a home than to buy one. Homeowners in a seller’s market have to face a dilemma: on one hand their home is worth more than ever before, but on the other hand buying a new home will come with a hefty price tag. With the right strategy, it’s possible to benefit from the market conditions and successfully complete both transactions.
Here are a few tips from our team to navigate this situation.
Step 1: Begin by setting up an alert for your new home
In a seller’s market, homes can sell in the matter of days. It’s important to browse the market and see what type of homes are available before listing your own.
Step 2: Get a professional evaluation for your current home
Next, have an agent evaluate your home to determine its current market value. Property evaluations are free, and non-binding. A broker will also be able to give you a reasonable estimate on how long your property will take to sell, based on its characteristics and location.
Based on the results of your initial search and your evaluation, you can choose one of the following options:
Option 1: Buy with a bridge loan, then sell
To prevent too much delay between selling your home and finding a new one, you can apply for a home equity line of credit, which will provide you with the necessary funds to put down a downpayment on your next home. In the meantime, prepare all the documents you’ll need for your sale. Once you have an accepted offer on your dream property, you can quickly list your current home and hope for a quick sale.
Option 2: Sell first, but find a buyer who is flexible on timings
Buyers and investors are often willing to negotiation on the closing dates, especially when when inventory is low. If you choose to sell first, include a clause which will give you some time to find a new home before handing over your keys.
Option 3: Buy first, but make a strong contingent offer on your new home
If you find a home you love before finding a buyer for your current property, you could make an offer contingent on your existing home’s sale. Be sure to make the offer as strong as possible, perhaps by offering a higher price or by asking your broker to communicate with the listing broker about the seller’s preferences.
Option 4: Consider turning your current home into a rental property
If your credit permits it, consider finding tenants for your current property. In a hot market, it’s always easier to secure low vacancy rates. This will allow you to continue building equity while you pay the mortgage on your new home.
Option 5: Look for a private investor
Private investors will be more flexible on closing dates, since they are usually looking for rental properties and not primary residences. Finding a buyer in a private network will give you the leverage to negotiate your delays when it comes to finding your new home. Sign up to a private investor’s network here.