Multiple Offers Got You Down? 3 Tips on Winning Your Next Bidding War.
February 19, 2021 | Buying
Ok so it’s no secret that the GTA housing market is on fire. Multiple offers have not only become the norm, the amount of them are exceeding anyone’s expectation on offer night. If you’re a Buyer, searching for a home, putting in the offers and losing out, here are 3 tips to score you a win the next time around!
1. Money Talks.
Whether you like it or not, the Seller’s primary reason for accepting one offer over another is – MONEY. The highest dollar someone is willing to pay for a home is usually the winning ticket. However it doesn’t always mean offering up fifty thousands over the next guy. At times, even going up in a few thousand dollar increments can mean a winning bid.
As an Abode Secret Tip: we like to set up our buyers offers just slightly over the closest five & ten thousand dollar mark to get a slight upper hand just in case another buyer’s offer in at the same price point (IE: Offer $856,500 vs $855,000). It’s a small but clever trick to up your chances in winning!
An important note to keep in mind when offering top dollar; the bank will only lend a mortgage amount based on what the home actually appraises for. If your offer price is accepted at an amount that is higher than the banks appraisal, the difference will be paid by you and your savings. Not the banks’.
2. Have Your Pre-Approval in Hand.
Show the Sellers just how serious you are! Ensure that you’ve gone to the bank well in advance and know what you can afford. It not only gives you the confidence to put in an offer at Top Dollar, it also gives the Seller’s the confidence that you’ll be able to close the deal.
What exactly is a Pre-Approval? It’s a letter from the bank that specifies just how much the bank is willing to loan you in the form of a mortgage. This number is based on you (and if applicable, your spouse/partner’s) monthly income, unsecured debt and the amount of a down payment you’re able to put down. The letter is usually good for 3 month’s from the time it’s issued.
Another Abode Secret Tip: Have a Pre-Approval letter written up by your lender specific to the property you’re offering on and hand it in along with the offer. This shows the Sellers you mean business.
3. Leave Out the Conditions.
We know it’s a tough pill to swallow, but if you’re planning to win, it’s a necessity in this hot market. During a Seller’s market, competing against multiple other Buyers just as hungry as you are, you’re going to have to come in strong to compete.
The most frequently used conditions in an offer to purchase are a Financing condition & a Home Inspection condition. These conditions would allow the Buyer an exit should they not be able to come up with the financing or a home inspection finds something they’re not happy with.
When Seller’s are looking at multiple offers in front of them, they’re really only going to pay attention to the ones that don’t offer a way out. If you want to win in today’s market place, you’ll have to do your best to make your offer firm and without contingencies such as conditions.
Abode Secret Tip: RE: Home Inspections – Some of our most savvy Buyers have brought along a trusted home inspector during their pre-offer showings, so that they can discover for themselves any issues that may be found with the home. If nothing is found, they can proceed with a level of confidence; if something is found, they can decide if they’re up to fixing it or pass on offering all together.
Typical items to look out for:
- are the lights working?
- are the toilets/faucets leaking or smell funny?
- are the appliances working?
- gutters clean and directing water away from the home?
- any cracks in the foundation? any watermarks in the ceiling?
Knowledge in advance = power on offer night.
Abode Secret Tip: RE: Financing – Double up on your confidence! By following our tips, you’re already Pre-Approved for a mortgage and have established a relationship with a lender. Have you or your real estate agent reach out to that lender with the specific property MLS sheet as soon as you can and have the lender confirm you’re good to offer a specific amount come offer night!
