It has been a while since we discussed bidding wars and competing offers and, with the market becoming more competitive on a daily basis, we thought it was about time to bring up this topic again.
In a hot market where few homes (or few similar homes to the one you're looking at) exist, it's EXTREMELY common to be competing against other offers. Here are a few things to consider when working with your real estate agent:
1) Know The Market
Just because the seller has their home listed for a specific price does not mean that they have priced it accurately. Hopefully you're working with a local agent who knows the area you're and they can advise you on the true market value of the home, if they're not, make sure you both do your research first.
2) Don't get Sucked into the Asking Price
Some buyers have the mentality that they don't want to spend over the asking price, however, as discussed in the first point, the asking price may very well be completely different from the market value. Market value is the important number to consider (if you don't want to spend more than asking because that happens to be your financial cap, that's completely different).
Once you know what the true market value is you may as well forget about what the asking price is and put your best foot forward.
3) One Chance
In multiple offers it is common to only be given one opportunity to place a 'bid' on the house. Ask yourself, "if I found out that I lost the bid to a purchase price that was $1,500 higher, would I be upset?" Put your best foot forward and cross your fingers.
4) Conditions, Closing Date and Deposit
While price is often one of the biggest components associated with adding value to your offer, there are other areas that may appeal to the seller if presented favourably.
-- CONDITIONS --
It's common when completing an offer to have conditions allowing you to get approved for a mortgage, to complete a home inspection, etc. When competing against other offers though, removing one or all of the conditions could make your offer far more appealing to a seller, especially if they had a deal fall apart in the past due to a home inspection or failure to arrange financing.
If you are adamant about having the home looked at, try to get in with an inspector prior to the offer presentations and discuss your approval with your mortgage broker to see what their level of comfort with your approval is.
-- CLOSING DATE --
If the seller needs a specific closing date and you're able to accommodate them, you're one step ahead of those who can not. Make sure your agent probes the selling realtor to find out what the preferred date is.
-- DEPOSIT --
The bigger it is, the more attractive it looks and if you can have a bank draft prepared for the time your offer is being presented it shows that you're committed and financially capable of purchasing the home.
5) Present it IN PERSON
Agents are getting lazier with each passing day and the introduction of new technologies. Make sure your agent makes every effort to present your offer in person rather than simply emailing it. Watch our recent quick tips video here for details about that and why it's so important.
There you have it, some quick tips on how to increase your odds of winning the bid and buying your dream home! Be sure to subscribe to our Youtube channel so you dont miss out on our weekly videos and follow us on Facebook for regular market updates and interesting information.
For help buying or selling your home, give us a shout! You can text us directly at (416) 707-8401 or email firstname.lastname@example.org.
Ariel and Adrian
Century 21 MIller Real Estate