The short answer
Waiting until friends, family or neighbours tell you it’s time to buy usually means buying when everyone else is, and that’s the worst time: fewer homes to choose from, multiple offers and more pressure to overpay. A quieter market like this one lets you look, inspect and negotiate a fair deal. Being ready means your current home is dealt with, your numbers have been properly checked, and you’ve chosen a payment you’re comfortable with, not just one you can qualify for.
The lemming effect
People wait for peer pressure, as if buying with the crowd makes it less painful. But when everyone’s buying, there’s less to pick from and more competition for every listing. Plenty of Kelowna buyers remember five offers on a property, writing more than they were comfortable with and never knowing what they’d get. Today you can find a place, view it, even inspect it, and often nobody else is looking. That’s a healthy place to make a fair deal for both you and the seller.
What “ready” actually looks like
If you’re in a condo you haven’t sold yet, sort that out first. Looking at homes you can’t act on is pointless, and our guide to selling first or buying first explains how the timing works. If your numbers haven’t been checked, you’re not ready either, because you don’t know what you can afford or what you want to afford. And look past today’s payment: what happens to it if rates go up or down?
Your approval isn’t your budget
Too many people buy the house they love and then can’t afford a life, because everything goes to the mortgage. We deliberately keep approvals in a reasonable debt service range rather than at the maximum, so there’s room for a vacation or whatever matters to you. More on that in how much mortgage you can afford vs. what you’re approved for.
The first step
Get to know your numbers. Talk to a mortgage broker, whether it’s us or someone else, and have them go through everything so you understand exactly where you stand and where you’re comfortable standing. If you’re buying for the first time, here’s how to choose a mortgage broker as a first-time buyer.
The realtor’s side
Dallas Crick of Hilbert & Crick Real Estate Group answers the same question from the realtor’s chair, including buyers who wait for their parents’ permission and his own first house in Crawford. Watch Dallas’s video.
More videos: See the full series with Mike Lloyd and Dallas Crick.
Full transcript
Dallas: So when it comes to buying, why would you wait for your friends to tell you to buy, or your neighbour, or anyone like that?
Mike: So true. But people do it. They all kind of want everybody to peer pressure them into doing it or something. I don’t know. It’s strange.
Dallas: The lemming effect.
Mike: They all jump together.
Dallas: Yeah, exactly. Then it’s less painful. And you know, if you think about it, when everyone’s buying, why is that the worst time?
Mike: Because then there’s less to pick from, fewer options for you to buy and more pressure. I mean, we remember five years ago when there were five offers on a property, and it’s a terrible feeling. You never know what you’re going to get. You’re having to offer more than you feel comfortable with. That’s a nasty feeling to be in, but people forget that pretty quickly. And here we are where you can literally find a place, take a look at it, even inspect it, or do whatever you want to do, and still nobody else is looking at it. So you’re in a position to hopefully make a fair deal for both you and the person selling. And that’s a healthy place to be in.
Dallas: Yeah, and when it comes time to buying, like being ready, I always say you can’t just go look at puppies, because you’re going to take one home. And when it comes to buying a home, what does it look like to actually be ready?
Mike: Yeah, I mean, it’s a tricky market for this. So you’ve got to have everything ready. If you’re sitting in a condo and you haven’t sold it yet, don’t bother looking at places you might like, because that’s pointless. You’ve got to get that dealt with. Or if you’re not pre-approved or pre-qualified, which is more important, then you’re not ready either, because you don’t know what you can afford or what you want to afford. It’s great to say that you could afford this payment, but what about that payment if rates were to go up, or rates go down? You’ve got to look at the whole scenario of what you can really afford and what you’re comfortable with. Because you and I have both seen too many people who buy a house and are in love with a house, and now they have no life, because they can’t afford a life, because they’re just paying for that mortgage.
Dallas: Yeah, so that leads into the next question. What exactly is the first step?
Mike: The first step is getting to know your numbers. And really, I’m not trying to sell myself. I’m just saying talk to your mortgage broker, whoever it is, whether it’s me or somebody else, but understand exactly where you stand and where you’re comfortable standing. That’s really important. You’re not going to know that until you’ve had somebody go through all the numbers and understand what that means for you and your family and your life.
Dallas: I think another good point, Mike, is when it comes to buying a place, you may approve them up to a certain amount, and that’s not always the best scenario, right? You’re just house poor. All your money is just going into your house.
Mike: Yeah, I have that conversation a lot with clients, and we purposely try not to actually set a really high number. We try to keep it down in a reasonable debt service ratio range, so it’s not the max, because you’ve got to have some room to manoeuvre and be able to go on a vacation if that’s important to you, or whatever it is. But the worst thing is to move into a great house and then feel like you can never do anything with your life again.
Dallas: Exactly.
If you’d like to know your numbers before you start looking, book a free, zero-pressure strategy session.
Frequently asked questions
Is it a bad idea to buy when everyone else is buying?
It usually costs more. When demand is high there’s less choice and more competition, so buyers end up in multiple offers paying more than they’re comfortable with. A quieter market gives you time to view, inspect and negotiate.
How do I know I’m ready to buy a home?
You’re ready when your current home situation is sorted, your income, debts and down payment have been properly checked, and you’ve tested your payment against higher and lower rates and you’re comfortable with it.
Should I borrow the maximum I’m approved for?
Usually not. The maximum is what a lender’s formula allows, not what leaves room for the rest of your life. Most people are better off setting a budget below their approval so the mortgage doesn’t crowd out everything else.
