Truly understanding the Canadian real estate market takes a lot of time and expertise. The trends and nuances of each neighborhood are so specific that even professionals may feel at a loss from time to time. But despite the intricacies of real estate, homebuyers can still learn plenty if they take the time to do their research first. Acquiring general knowledge of what homes are selling, why certain homes may sell more than others, and why certain features are more valuable than others can be the keys to getting started. Homebuyers who want to approach their research as efficiently as possible should keep these tips in mind.
Most buyers will start with the average sale price in the area to get a general sense of what they can afford and which homes they're most likely to run across in their price range. What's so helpful about past data is that it's irrefutable. There is no guessing about certain facts and figures: buyers can see exactly what recent buyers spent on each property and when each property was sold.
Buyers can see how sale prices fluctuated from one month to the next, and how long homes sat on the market before they were sold. It can give buyers an indication of what they need to do to get the home, even if the odds aren't in their favor. Toronto and Vancouver are clearly sellers' markets right now, but even tight markets give buyers some wiggle room.
Caveats for Past Data
There are a few things that historical data can't reveal, so it's important to keep those unknowns in mind:
- Bidding data: Buyers won't be able to tell if the sale price was the result of an intense bidding war or a contingency battle. They won't know if the seller covered all the closing costs or the buyers agreed to forego the cost of the sewer repair.
- Practical matters: Historical data won't tell a buyer who conducted the home or title inspection or whether the home has unpermitted work on the property.
These facts can shed a lot of insight into the discrepancies between homes, and may or may not apply to the buyer's sale. If a seemingly perfect home sold for well undervalued, it may be because the seller sold it to a relative or because their plumbing system needed extensive work.
The next step is to understand more about the future of the area. Are younger people moving in because of a tech boom in the area? Are property owners desperate to sell because of new legislation? Are Glenrosa home sellers likely to see unreasonable demands because they're in a buyer's market? Is there speculation over a new company coming to the area? Once home buyers know at least some of these answers, they can better formulate a strategy as to how and when they should bid. Typically, it's the buyers who have the luxury to really comb the neighborhood that are most likely to find a quality home in their price range.
Local information can be difficult to find (unless a person is living in a highly watched city). Talking to a real estate agent can be a great way to round out the pricing data and news stories that buyers can readily find online. For example, a real estate agent may be able to share that a proposed housing development is unlikely to be built in the area or that buyers who compromise on certain features are more likely to have their bid accepted. These perspectives can be invaluable to a homebuyer who wants to arm themselves with as much information as possible before heading off into the market.