<img height="1" width="1" src="https://www.facebook.com/tr?id=390674378043480&amp;ev=PageView &amp;noscript=1"/> How To Win A Bidding War In Toronto - The Storey Team : Toronto Real Estate

The Storey Team : Toronto Real Estate

How To Win A Bidding War In Toronto

23 March 2018
Tom Storey

Purchasing a property can be stressful, and if it’s your first time buying you’re going to feel the effects even more. Whether your living in a hot sellers market, or a market where buyers have the upper hand, there is always going to be properties that attract more then 1 offer and turn into a bidding war. So…. how do you win?

Do your homework.

This may seem obvious, but in the heat of the moment making logical decisions sometimes doesn't happen. Know the area you are buying in, check the comparable sales in the area, and know your limit. There are so many variables in play on offer night and you need to make sure you are as prepared as possible.   

Don’t get emotional (easier said then done)

I know, I know… buying a home is one of the most emotional things you will ever do in life. You are purchasing your largest asset, where you will spend many years making memories with your family. However, you don’t own the house until the offer is accepted. Keep this is mind, and try your very best not to get attached to something you do not yet own. You can “like” it, but try not to “love it” until the purchase is firm. I’ve told this to hundreds of clients, and it’s impossible to actually do, but try your best!

Conditions 

When purchasing a property, there are two types of offers. Conditional offers, and firm offers. Typical conditions involve house inspections, mortgage approvals, and for condos there is a status certificate review. If you’re in a situation where you’re bidding on a property against several other offers, the less conditions you have the better. However, only remove conditions if you’re 100% confident that you already have everything in order. This means making sure you are pre-approved, satisfied with the home inspection, and your lawyer/mortgage broker has given you the OK to remove conditions.

Bring your best 

Put yourself in the sellers shoes. If you get two offers on your property, and one is way higher then the other, you would accept the higher offer, but what if the lower offer would have increased their price? If you have a price that you are comfortable with, and wouldn't be upset if someone beat you by $1,000 then put your best foot forward. This is the best way to ease your mind during the process, because you know your limit and you won’t be upset if someone pays more. Some sellers will only do one round of offers, and if you don’t come with your best number, you may not get a second chance.

Make sure you’re pre-approved. 

This is potentially the most important factor. When you are pre-approved from the bank or a mortgage broker, they are approving you, not the property. A common misconception is that they are pre-approving the property you purchase as long as you stay within your price range. There are several issues that could arise, so be sure to send your bank or mortgage broker the property information before you make an offer.

Hire a Realtor, who is working for you. 

Having a professional on your side helps. The listing agent works for the seller, and they have a legal obligation to get the best possible price for the seller. If you think you are saving more by working with the listing agent, you’re not! A buyer agent does not cost you anything, and they are working for you!

Show up with a cheque in hand. 

Have your deposit cheque ready on offer night. It shows the sellers you’re serious, and will give you a huge advantage. I’ve seen my sellers accept a lower priced offer because the buyer had a deposit cheque ready.

Write a letter

At the end of the day money talks, and most of the time the seller is going to accept the offer with the highest price, preferred closing, and least amount of conditions. Is there a way to win an offer if you can't bid the highest price? What if you wrote a paragraph to the sellers telling them how much you love their house? Tell them a bit about yourself and how you’re buying this house to build memories. If a few offers are close, this could be the reason they choose you!

Now remember, losing out on a house sucks, but it’s not the end of the world. Prepare yourself and understand the process so you can put yourself in the best possible position.