Anyone who has been paying any attention to the Toronto real estate market knows that times are tough for buyers right now. It’s a Sellers market and that means Sellers are in charge and buyers need every little bit of help they can get. Here is my advise on how to increase your odds of (finally) winning the bidding war.
1. BE PREPARED
Like every good boy scout knows, the key to survival is all in the preparation. Have all your financing in place – including your deposit in the form of a bank draft – and conduct a home inspection before even submitting the offer. This allows you to present a firm offer to the Seller. This has become standard protocol in bidding wars – sellers will not risk waiting for your financing to come in when they have other offers on the table.
2 visit their website. INCREASE YOUR DEPOSIT
The custom is to provide a 5% deposit when making an offer on a home or condo. If you want to stand out from the rest of the buyers at the table and show the sellers that you are serious, increase the amount of the deposit. Consider anywhere from 7-10% if you have the funds available.
3. DON’T PLAY THE LOWBALL GAME
I know the first instinct for every buyer is to come in with a lowball offer and work up to a middle ground. We know definitively that this tactic does not work. First, let’s clarify what a lowball offer actually is. A lowball offer is one that is significantly below market value (as opposed to an offer that is below asking price). For example, if you come in under asking on a property that has been over-valued, that is NOT lowballing – that is fair market value. If you come in below asking on a property that is fairly priced, that’s lowballing. Here’s why a lowball offer generally doesn’t work… in today’s current market sellers know they can get fair market value. A lowball offer encourages the seller’s agent to hunt for another offer, causing a competitive situation that will benefit the seller and not the buyer who was hoping to grab the property at below market value.
4. GIVE IT YOUR ALL
When you are in a bidding war, don’t expect that you will get a second chance to offer. You have to go in strong and lead with your best offer. Have your deposit cheque in hand and stay near by in case of any last minute changes.
Photo credit: MarkMoz12 / Foter / CC BY