How low will it go? The Bank of Canada recently announced its key interest rate will be cut once again — news Canadian home buyers and owners will most certainly welcome.
Canada’s central bank made the announcement Wednesday, July 24, stating its key interest rate would decrease from 4.75% to 4.5%.
Speculation a rate cut was on the horizon started ramping up in mid-July following Canada’s latest inflation numbers that showed a slower-than-expected rise in consumer prices.
The last rate cut helped spur some buying and selling activity in Canada as the Canadian Real Estate Association (CREA) reported a 3.7% increase in home sales in June compared to May.
“That is not record setting or anything, but it’s also not just volatility — that’s a noticeable increase that we weren’t seeing before,” said CREA Senior Economist Shaun Cathcart.
Of course, homeowners, buyers and sellers have been paying close attention to interest rates as it has major implications on mortgage payments. Another cut could further increase Canadians’ confidence in buying or selling real estate and how much home they can afford.
Are you prepared for what may happen next? Do you know all the ins and outs of what comes with a busy real estate market? This is why finding the right REALTOR® for you is such a crucial step in the process. Navigating the current real estate landscape is tricky in times of uncertainty, but luckily for you, your REALTOR® can help calm all your concerns. Here’s how.
Market insights
Canadians far and wide have shown interest in jumping back into the market. If data from CREA is any indication, don’t be surprised to see multiple offers, prices going over asking and lineups at open houses once again should all this pent-up demand
continue to be released.
Remember, your REALTOR® has access to data pertaining to your local housing market and may have experience navigating hot markets in the past. They know the stakes are usually high and they know they need to act fast in a busy market. Managing showings, offers, conditions, negotiations, finances, moving companies, packing — it’s all too much! Let your REALTOR® help you!
For sellers, your REALTOR® can get information on comparable homes and see what they sold for and when, access the exclusive MLS® Home Price Index — an advanced, highly accurate way to gauge prices and trends in specific areas — and know what buyers are looking for in your region.
For buyers, your REALTOR® is there to work for you and get the best home for you. They can advise you on what to expect in your local market, from commute times and proximity to amenities, to noise levels and municipal regulations you may have never heard about.
Negotiation skills
It doesn’t matter if interest rates are at 5%, 10%, or 1% — at the end of the day, your REALTOR®’s top priority should be looking out for you and making sure you’re comfortable with whatever price you land on.
Of course, a buyer’s agent should know what their client is pre-approved for, and interest rates often affect how much home one can afford. Make sure you communicate your wants, needs and budget so your REALTOR® can properly advocate on your behalf. You can look for REALTORS® with a Certified Negotiation Expert designation or a Master Cert fied Negotiation Expert for those who have received extra training.
Financial guidance
Did you know your REALTOR® can help you before you’re pre-approved? That’s right! With interest rates dropping, you may want to act fast. Consider reaching out to your REALTOR® to get a handle on how your local market is reacting to the latest news from the Bank of Canada.
Your REALTOR® can also provide you with a list of lenders they’ve worked with, not to mention offer some tips and tricks to help you solidify a better rate (like, make sure you shop around before signing!).
Before doing anything, have a look at the Mortgage Calculator Hub — and the other search options — available at www.winnipegregionalrealestatenews.com which can provide you with the tools to help you get an early look at your financial situation.
Professionalism and sense of security
One of the biggest worries for Canadians on the move is the uncertainty of conducting a real estate transaction. There are so many variables (not just talking about interest rates here!) to think about. From land transfer taxes and lawyer fees, to dealing with complete strangers while trying to complete one of the largest financial transactions of your life — you have a lot on your plate if you’re buying or selling.
Also, the right REALTOR® for you will just get it. They won’t push you into something you’re uncertain about and can even help with market timing strategies should you want to try and make the current interest rate situation work better for you.
Home buying and selling MVP
We’ll say it again: your REALTOR® is your personal real estate MVP. While you’re figuring out financing, they can already get to work behind the scenes. If you’re buying, this means setting up searches for you, attending open houses on your behalf, and asking around to their connections about what might be coming available — hey, with interest rates dropping, anything you can do behind the scenes to get a leg up on your competition is worthwhile.
If you’re selling, your REALTOR® can get to work marketing your property right away, getting it ready for staging and compiling documentation, all without disrupting your routines too much.
By now you know interest rates impact the Canadian real estate landscape and that likely isn’t about to change any time soon. Making the right decision at the right moment seems like a lot of pressure when you don’t know where interest rates will be on a month-to-month basis.
Thankfully REALTORS® monitor market trends and housing data to make sure, whether you’re buying or selling, your best interests are being kept top of mind.
— REALTOR.ca