Buying a home in Vancouver is more challenging than it has ever been. There is limited inventory and homes are consistently selling with competing, multiple offers. Is the inherent value of living in Vancouver rising this rapidly, or is FOMO (fear of missing out) a factor?
To be a successful buyer, the offer cannot contain one subject condition. Remember, a subject condition is a safety-net clause in your legal offer to buy, that protects you in case anything comes up during the due diligence process.
Still homes oftentimes sell for as much as 10 to 20% over the asking price. This is alarming to say the least.
In this type of market condition it is very difficult to advise your buyer client. The last thing I want as a real estate professional is to have my buyer overpay for a property or to buy a lemon.
Here is the process I have been seeing with some of my clients:
1 Make an offer on home
2 Get outbid on price
3 Make another offer on a home (only this time the market is even stronger)
4 Get out bid AGAIN!
This “write an offer / get out bid” process can go on for 5 or six offers over a few months until they are finally successful in purchasing a home. It is not that the buyer is doing anything wrong either.
Sometimes they honestly just reach the threshold and upper limit on what they can afford to pay and the bank is willing to lend.
Other times they just don’t see the value past a certain point. I can hardly blame them. It is difficult to put a value on a home when values are escalating so quickly.
The worst part is when a buyer misses out and gets outbid by $5,000 on a $700,000 or $800,000 condo. My heart breaks for them because the next time up to bat the market is even stronger with more competition and higher prices.
The frustration builds and builds for buyers in this type of market. Eventually, when they are finally successful with the “winning offer” (sounds ridiculous because are they really winning?) they are so beaten down by the process.
So, what do you think? Is FOMO driving our market?