Winning a Bidding War in Today's Real Estate Market

Monday Apr 03rd, 2017

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Are you a first time buyer, looking for a bigger home, or downsizing or upgrading? Investing in real estate is a smart decision – but only if you do it wisely. Bidding wars, on today's hot market is everywhere. Here are some tips you may consider. 
 
1. Have your self pre-approved in mortgage 
Have a pre-approval for the maximum price you can bid. 
The bank will definitely do the computation of all your expenses that needs to be set aside. It's better to be safe than sorry. 
 
 
2. Do your research if this is the one you really like 
Purchasing a property is the most expensive financial decision most people will ever make. It is very advisable to  spend time to research the neighbourhood, your proximity to work, your children's school, etc. This will eventually save you time if you need to joggle things around.
 
 
Before you bid, be sure you know what you are getting yourself into and if it’s worth going over the asking price. If you’re looking for a great school for your children – great, but if you’re empty nesters, you might consider another home to avoid paying a premium for access to a school that you really don’t need.
 
3. Try to beat the competition ahead of time
 
There are exclusive properties not posted publicly that I (or your agent has an information or list). Those ones - a buyer may want to consider before it hits the public and place a reasonable (best bet) if it is the home you would like to have. 
 
There are also properties who are accepting pre-emptive offers, these ones will definitely take you out of the stress bidding zone. 
I can shortlist properties that will match your criteria before they go public or before the offer dates. 
 
 
4. Hire a Realtor that you will be comfortable to work with 
As your Realtor, I always keep my client's interest ahead and I never want to pressure. 
Choose your Realtor wisely - the one whom you can say "no" if your heart says "no" and will tell you "this is a good one that you might consider -- but don't go above $$$"...  Those are the advice you will want to hear as you don't want to spend more money than you actually have.
prepare your offer with an agent who won’t talk you into a deal that might cost you more money than you actually have.
 
 
6. Let's keep your offers "FIRM". 
Not everyone is after top dollar when it comes to selling their home. Should you heard about a family who put an offer less than $150,000 compared to the highest offer but they still won the bid. 
A "Firm" offer cross out conditions on financing, status certificate, and Inspection (inspection report might be available from the seller or can be arranged before the offer).
 
7. Be flexible
Winning a bidding war might be as easy as agreeing to the seller’s conditions like closing dates, buying a property “as is”, or even offering to move the closing date up if it works better for the seller. If a seller has already bought another property and is anxious to move on, agreeing to make the transition as easy as possible could mean winning over a more generous offer.
Accepting a property “as is” and limiting conditions such as requesting that missing ceiling tiles in the basement be replaced or the broken bedroom window be fixed might work in your favour too. If your realtor is privy to any information about the seller’s situation and if you can be amenable and flexible in any way, take advantage of the opportunity and try to stand out from the others.
 
8. Have your Deposit Ready 
I always advise my Buyers that a  significant deposit in a form of certified cheque can show we mean business. 
Put as much as you can afford down, it goes towards the down payment anyway if you get the property, and you get it back if you don’t firm up on the offer. A clean offer with a large deposit in the form of a certified cheque could mean winning the deal over another buyer.
 
 
9. Write a "personal note" on the offer
Have you heard about the family who won the bidding war for a property in Oakville even if they put less than $150,000 vs the highest bid?
Despite their offer being significantly lower, the original owners felt a strong connection to their story and decided it wasn’t about the money but about the next generation who would really appreciate a fantastic home.
Adding a personal touch and note will never hurt. 
 
 
10. Know when to walk away
Know your limits, do your research and don’t overextend yourself because it will just take you that much longer to see a return on your investment. Buying a home should not be a competition. It’s not about “winning the bidding war” but about finding a great place to build memories – and equity.

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