I have a deal closing next week that illustrates this perfectly.
About a year ago, I was encouraging my buyers to get their financing in order. They knew buying a home was in their future, but they weren't ready to start looking just yet. My advice was simple: get everything in place early. That way, when the right house came along — the house — they would be ready to put their best foot forward.
They took that advice. They worked with their mortgage broker, gathered their financial documents and got their financing sorted out well ahead of time.
Fast-forward to this fall. After viewing 17 properties, they found the one they wanted. And, as it happened, their final pre-approval had just come through that very week.
We were the first to see the property. Two more showings happened the followed the next day, and then something we don't see very often in today's market happened: one of the other parties decided to offer and we were in competition.
My buyers offered a little over asking and included their pre-approval letter. The seller's agent even called the mortgage broker to confirm that this was a solid pre-approval, backed by a full review of the buyers' financial documents.
Our offer was accepted.
I can't say for certain that the pre-approval was the deciding factor, but I believe it helped give the sellers confidence in our offer. And that preparation, which began a year earlier, had put my buyers in a position to act when it mattered.
We still included a financing condition, of course. A pre-approval is not a final mortgage approval, and buyers should understand the importance of protecting themselves while the lender completes its final checks.
But imagine if my buyers had waited until they found the house to start arranging their financing. They could have missed an opportunity to make a strong, well-prepared offer. When the right house comes along, being prepared can make all the difference.
The lesson? You don't have to be ready to buy today to get ready to buy.
If you know a move is somewhere in your future, speak with a mortgage professional now to understand what you can comfortably afford. Ask what documentation you will need to obtain a firm pre-approval, whether a rate hold is available, and how long it will last.
There are signs that the Bank of Canada may be considering an interest rate increase in response to renewed inflation concerns. No one knows for certain what the BoC will decide, but if buying a home is in your plans for the coming months, why not get your financing in order now?
As my buyers' experience shows, you don't have to be ready to buy today to get ready to buy someday.