As the real estate market continues to steamroll through last year’s premature expectations for a slowdown, buyers are left to consider their greatest fear – am I over spending if I submit an offer on a property now?

Although sellers in this healthy seller’s market are enjoying the fruits of their patience, buyers are often stuck in no man’s land wondering which direction to take.  Should I submit an offer and compete for a property?  Will prices continue to increase if I don’t?  Interest rates are so low right now, am I not taking advantage of this once in a lifetime opportunity?  If I do submit an offer ‘over asking price’, am I stretching myself too thin?  Will the market ever settle down, or possibly, crash?

In the heat of a competition battle, these are certainly concerns a buyer may express to an agent on the cusp of pulling the trigger on an offer. However, are these concerns, or rather, worries, justified?  It is completely natural to doubt transferring well earned income from a safe and somnolent bank vault into a home that may require more money to renovate and reach its ultimate potential.  Furthermore, if I am a buyer who is looking at real estate as an investment, additional doubts may surface as to the value of the investment.   Will I lose if I spend too much in acquisition?  Will I cover my mortgage with rental income?  Am I consigned to accepting a loss for the purpose of property appreciation down the road? 

Whether you want to call it doubt, or fear, the risk of investing in real estate is relative to other similar risks, like investing in a volatile stock market.  However, with real estate, the risk IS mitigated by the demand for housing in highly acclaimed areas.   Not only is Canada considered one of the most desirable countries to immigrate to, but locations within proximity to internationally recognized Metropolis centres like Toronto and Vancouver, will always appeal to investors who are exploiting real estate for much more than a place of residence.

Yes, the prices are going up.   And yes, the competitions are getting more fierce.  But real estate in a young country like Canada is only getting started, by historical measures.  So getting in on this real life game of Monopoly as an answer to the question “why” is not as risky as the notion of “when.”  Sooner or later, you may want to jump into those deep waters, but if you can swim, will you not have the confidence to eventually reach shore?

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