Real Estate markets in certain locales across Canada are as hot as they’ve ever been, and there’s no getting around the fact that it means that bidding wars are often the norm for attractive properties. Here at Real Estate Leads we’ve put a lot of effort into providing our online lead generation system for realtors together, but another part of what we do is share industry insight that realtors can share with their clients OR those clients can benefit it from it themselves directly.
As stated, these bidding wars are standard procedure in many parts of Canada. More and more prospective buyers are facing off against another buyer for their dream property, and no doubt it can be stressful. Far too many people go above and beyond their REAL purchasing means, but there’s no reason you have to drain your bank account in order to purchase a home you love. Realtors who have been involved in many multiple-offer situations during their careers have loads of advice on how you can best approach a bidding war and act prudently within it.
Every bit of their advice circles around one particular maxim; make homeownership decisions with your head, not your emotions. We’ll add to that it’s often far too easy for prospective buyers to falsely insulate their perception of what makes the home a ‘must-have’ when the prospect of a bidding war is looming. The token first consideration is to be 100% honest with yourself and always be reevaluating your position with an especially critical and objective view. After all, the purchase of a home is very much not one to be taken lightly!
Anyways, here we go with our 6 tips for being in a bidding war for a home.
Understand Market Value
Regardless of what a house may be listed for, it will typically end up selling for what it’s truly worth. It’s recommended to determine the home’s market value by consulting with a real estate agent or looking up comparable properties via the local MLS before bidding accordingly. For example, if the house is listed for $100,000 less than it should be then most of the offers won’t extend past the initial round of bids. In these instances, prospective buyers who bid low likely shouldn’t have been there in the first place.
Don’t Hold Back on Putting in Your Best Offer
Should you be up against 2 or 3 other bids, it may surprise people to learn that it’s best to give their best offer right away. You can then be of the perspective that if you don’t get the house, you can have some assurance in knowing that you gave it your best bid. Keep in mind that putting in your best offer doesn’t always mean going beyond your budget – determine a limit and stick to it. This is about getting the most ideal home for you, and not about ‘coming out on top.’
Nix Your Conditions
It will also be beneficial to have any and all prospective homebuyers understand that removing conditions from your offer may make your bid more appealing to the seller, and particularly so if your bid is similar to that of another buyer who’s less flexible in this regard. The financing condition is fairly easy to remove, as long as you have completed the mortgage approval process in advance of your bidding. Another recommended consideration is to think about eliminating the home inspection condition. That doesn’t mean you forego the actual inspection, however, as if you’re really interested in a home you can then pay on your own for an inspection before you state your offer as compared to doing so after you bid.
Bring a Certified Cheque
This one is big; If you’re serious about purchasing a home then bring a bank-certified cheque in the amount of the offering you’re prepared to make so that – should it be accepted – the sellers can deposit the money into their account right away. This has twofold benefits; one, it shows them you’re 100% committed to going through with the purchase, and two – it really gives them explicit incentive to move forward with your offer on the home.
Leave Ego Out of It
As suggested above, it’s unfortunately all too common to have problems arise when buyers get carried away with the competition and become compelled and singularly focused on winning the bidding war. Nothing is worth stretching yourself beyond your means financially. Being house poor is a real condition and increasingly legitimate problem for every greater numbers of people these days.
There’s no debating that having the wherewithal and good judgment to be able to accept that you’ve been eliminated from the bidding war is SO important if you want to eventually be in an ideal home AND one you’ll be able to afford. This cannot be shared with your clients earnestly enough!
Which leads to the final tip,
Be Prepared to Walk Away
Go ahead and be optimistic about your max bid but also be ready to move on. As is the common belief in the industry amongst realtors, there is a 90+% chance that any home that you see as being ‘perfect’ and ‘can’t miss’ will be outdone by one that’s either already on the market, or will be on it before long. This advice is even more practical for buyers who are already living in a home that they either own outright, or the majority of it. They absolutely do NOT want to be making ill-formed decisions with the equity they’ve worked so hard to build.
Being informative and helpful for your clients begins with establishing prospective buyers and sellers AS clients in the first place. To that end, our system is a great choice for profit and business growth-minded realtors across Canada. Sign up for Real Estate Leads here and receive qualified online-generated leads delivered to you exclusively for your protected region of the country.
From there, take those opportunities and work your magic putting people in homes they love on the way to making a strong name for yourself as a realtor in your community!
