As expected, rates went up by half a point yesterday - that's going to affect mortgages of course. A lot of people are locked in though, so they've got their fixed mortgages. We might not see an immediate effect, but in June there are rumours of another half point increase, so we are going to start to see the effects soon, for sure.
For now, we don't need to worry about the rates going up. Supply is going up, demand is still low. I've heard people saying that it's more of a balanced market right now. It's not really. It's more of a buyer's market right now (in most areas) and I think it's going to continue to be a buyer's market for a good few months to come. It's hard to predict sometimes - could be a few years, could be a few months, but it's safe to say that it's a buyer's market - right now.
So I did a deal last week and my buyers came in firm - a firm offer with no conditions. Then, the next day, they changed their mind and wanted to get out of it. I was thinking - oh no. I tried to bluff the seller's agent to let us out of the deal, but I know that when it comes to real estate law, when you sign on the dotted line, you're hooked, you're done. You can't get out of it. So there was an $80,000 deposit which they almost lost, but after thinking about it, they went through with it and firmed up the deal. So remember, even if you don't close the house and the house sells for more, it doesn't matter - your deposit is gone. It's not like other areas of law where if there are no damages then it's all good. It just doesn't matter.
I had one in the fall where the buyers actually did back out. I listed and sold it again - for $40-$50k more because the market kept going up. They had an original $50k deposit - and we split it - my clients (the sellers) took $25K of that and sold for $50k more. They did really well. So the bottom line is - when you're buying real estate, be sure of what you're doing. 100% sure. Don't buy anything on a whim. Contracts are locked in - you're signed under seal when it comes to real estate!
