If you have spent any time out and about in the city then you may have noticed the increasing number of Calgary homes for sale as of late. With the market evidently transitioning from a sellers market to a buyers market, it’s more important than ever for homebuyers to have a firm grasp on negotiation tactics when looking at houses for sale in Calgary. Those who do may find that it‘s a great time to enter the market. Because the real estate market is so dynamic, I’m also going to outline how a homebuyer should negotiate in a sellers market. This means that understanding the state of the housing market is the first step.
These are the primary factors that determine whether it is a sellers market or a buyers market, or, if it’s in transition (known as a transitional market). These factors have a huge impact on negotiations and whether the negotiations will favour the buyer or the seller. It all begins with research. Here are some subjects to familiarize yourself with when preparing to negotiate for your new Calgary home:
- Historical Sales Prices: How have the housing prices changed over the past year? Here is a great resource to learn about Calgary housing prices: Calgary Real Estate Board (CREB) Housing Statistics
- How many units have sold in the past month compared to the same month in the year previous? Here is a great resource to learn about how many homes have sold: CREB’s Monthly Housing Summary
- Oil Prices: People may debate if oil prices actually have an impact on real estate, however, because of the media attention surrounding it, it does have an effect. Are the oil prices going up or down? How does the current price compared to the record highs and lows?
- Population growth: How many people are moving to Calgary?
Here are the conclusions that market analysts and pundits make regarding the above factors:
- If housing prices are going up, it favours sellers.
- If housing prices are going down, it favours buyers.
- If oil prices are going down, it’s favours buyers.
- If oil prices are going up, it favours sellers.
- If the population is increasing, it favours sellers.
- If the population is stagnant or decreasing (which is rare for Calgary), it favours buyers.
Now, irrespective of external factors on real estate, there are certain steps buyers can take to put themselves in a better position when negotiating.
Keep your options open! Plan ahead and don’t be in a rush to buy. When homes stay on the market longer, Calgary homebuyers have a larger inventory to choose from. In any negotiating scenario, the side with the most options has always had the upper hand. Buyers have the freedom to keep multiple opportunities on the backburner while they dip their feet and see which properties are best suited for them and their families. When this factor is coupled with the time sensitive nature of some home sellers moves, negotiations can result in huge deals for people buying a home in Calgary.
If at all possible, use time as an advantage in your negotiation. Some home sellers will lower their asking price if it means they can get their home sold faster. This is because they might fear that its value will only depreciate further if they wait to long to sell it. They may have also placed an offer on another home and can’t close until their current home has sold. There are many other reasons why people selling their home need to do it faster. For example,foreclosures. It’s a tough situation for the homeowner but it can be a real advantage to homebuyers in search of a deal. In any case, homebuyers have time on their side and they can make use of it when it comes time for negotiations.
While the Calgary housing market will have it’s ups and downs for buyers and sellers, the party that is acquainted with the most knowledge, and the party that has done its research, will inevitably come out on top. To see my article on 4 tips on how to research the Calgary housing market, click here.
And lastly, if you want to be able to really hold your ground at the negotiation table, it doesn’t hurt to consult a REALTOR® who can lend their insight into the housing market, the options available, and of course, the best deal. If you found this article helpful or would like to know more about how to negotiate in the Calgary Real Estate Market, feel free to contact me directly and I’ll do my best to lend a hand with your family’s next big move.