Buyers

How to Win a Bidding War in a Seller’s Market

You’d be hard-pressed to find a real estate agent in a major Canadian market that hasn’t been involved in a bidding war this year. Limited inventory and depressed interest rates have made markets like Vancouver and Toronto extremely busy. As a result, buyers are often competing with multiple offers on the same property, something that’s likely to continue given the current seller’s market. The prospect of a busy summer has buyers and agents across the country preparing themselves for active listings and multiple offer situations, which is why it’s never been more critical to understand how to win a bidding war. Here’s a look at how to win a bidding war in a seller’s market, but before we begin, an important caveat. 

These tips will help in most situations, but not all.

They say all is fair in love and war, but sometimes bidding wars just don’t seem fair. There will be situations when a qualified buyer will be willing to pay an extraordinary price for a property you’re interested in purchasing. In this case, there are no tips or strategies that will help you prevail, outside of trying your luck at submitting a solid backup offer should the deal fall through. If you find yourself in this situation, don’t despair. These aren’t typical circumstances, and you’ll be able to compete on the majority of homes in your price range if you follow the tips below. Read every situation as it comes, and know when to exit and look for other opportunities. 

Come prepared

You wouldn’t walk into a war without understanding the area and drafting a battle plan, and likewise, you shouldn’t enter a bidding war without proper preparation. Empower yourself to win a bidding war by following these three first steps. 

Understand the market conditions.

You should understand the market trends taking place in the community you’re considering making an offer in before making an offer and getting into any kind of competing situation. If you know what similar listings have sold for in recent months and what separates this particular property from past sales, you’ll be on your way to determining a fair offer that will compete. 

Get your finances in order before you make any offers.

In a seller’s market, it’s imperative that you get pre-approved for your mortgage before you start placing offers on homes. Typically if multiple offers are being considered, subject to financing is going to be a non-starter. Sellers are much more likely to go with a buyer who has financing already in place, so set yourself up for success at the bargaining table and speak to a lender as soon as possible. 

Work with professionals who can help you win.

Working with a trusted real estate agent and a mortgage professional is essential. An experienced real estate agent can help you win a bidding war more than anything else on this list, so don’t overlook your search for the right agent. Interview several agents, review testimonials from their past clients, and ask them how they approach negotiating with seller’s agents on your behalf. 

Be competitive with your initial offer

If you want to win a bidding war, you need to start from a place of strength, and writing a strong offer puts you in the running. Work with your agent to understand what things are going for in the area and what the sellers expect to get when they review offers. If there’s competition, it’s typically only the top few bids that will have a chance to win a bidding war, so making a competitive offer out of the gate is necessary. 

Talk to your real estate agent beforehand and set realistic expectations for your offer. There’s nothing worse than falling in love with a property and then realizing it’s going to go beyond what you can afford. Know that it may take additional dollars to secure a home in a seller’s market, so keep that in mind when you start your home search. You’ll find things less stressful if you start your search a little bit below your maximum budget, as this gives you wiggle room to negotiate up if you get in a bidding war. 

Act quick, and be flexible 

When you find a property you like, don’t wait too long to make a decision in a seller’s market – you’ll be surprised at how quickly offers are accepted in hot markets. Flexibility is key to winning a bidding war, and offering to move in quickly or in a few months can help sway a seller (depending on their preference). Have your real estate agent communicate with the listing agent and see when they’d be happiest to see a buyer take possession, and be clear that you can accommodate their wishes. It might seem small, but it can give you the edge in a close bidding war.  

Work with a proactive agent

The real estate industry is built on relationships. Having a proactive buyer’s agent that will communicate in good faith with a listing agent can give you an advantage over another buyer. If you’re serious about a property and want to win a bidding war, your agent should clearly communicate your level of interest. A good buyer’s agent will work with the listing agent to get to the bottom of what the seller’s are looking for, both in terms of dollars and non-financial motivations. This communication can help you craft a better pitch to the sellers. 

Know when winning isn’t winning 

When it comes to a bidding war, some people get incredibly competitive. Don’t fall into this trap. Know your limits, and when a deal feels out of reach, consider writing a backup offer instead of going over the top. There are times when sales fall through, and writing a solid backup offer can give you a shot should the buyer’s back out unexpectedly. You can also try expanding your search parameters if you’re having trouble competing. Where there’s less competition, there are more chances for you to come out on top. 

Bidding wars can be stressful in a seller’s market, but preparing yourself for the possibility of competition will give you an advantage and keep you feeling confident. Try these tips, and don’t let the stress of stiff competition keep you from purchasing your dream home. 

By Justin Kerby

HOME BUYING FEAR FACTOR

HOME BUYING FEAR FACTOR. It’s not as scary as it sounds

While the idea of buying a home may not be as terrifying as a room full of spiders or meeting your partner’s parents for the first time, it’s certainly a cause for concern for those who are thinking about taking the plunge.

IDENTIFYING THE FEAR
It’s no secret that buying a home comes with a number of fears and worries. The good news is that they are Continue reading

Everything you need to know about the New First-Time Home Buyer Incentive

The new federal First-Time Home Buyer Incentive (FTHBI) will officially come into effect as of September 2 this year.

Designed to alleviate mortgage costs for first-time home buyers, the FTHBI will provide shared equity loans of 5% toward the down payment of a resale home, and 5% or 10% for newly-built homes.

The idea is that by boosting the size of buyers’ down payments, the FTHBI whittles down
monthly mortgage costs, offering some relief on the costs of home ownership. Continue reading

Renting vs. Buying

It used to be that young couples would get married, buy a home and live there for the next 40 or 50 years. But times have changed. Home prices have skyrocketed in the past decade, making home ownership very difficult for some young people just starting out. It has also made some older homeowners more inclined to sell their now pricey homes and jump back into the world of rentals again, freeing up equity that they can use during their retirement years. Renting has become a much more affordable option for many – but just as there are downfalls Continue reading

What Clients are saying about Maureen

As first time home buyers, I could not imagine having anyone but Maureen helping us find our perfect home. She made herself available at all times, no matter what our question was or what time it was, she was determined to ensure that we were comfortable and informed every step of the way.

Maureen has such an incredible energy, and is bursting with enthusiasm which makes her a joy to work with. I would highly recommend her to anyone looking for a genuinely amazing Realtor who will provide top notch service.

Nick and Magda, Burnaby

7 Things That Can Go Wrong If You Hire The Wrong Real Estate Agent

Buying a home is the biggest investment you’ll likely ever make, and it has all sorts of implications for your personal and financial future. This is why it’s so important to work with the right agent.

Too many people don’t realize just how much can go wrong if they make the wrong hire. There are some very serious problems that can arise if you accidentally work with the wrong person to buy or sell a home. Here are some of them:

1. Not listening

A professional real estate agent (or any other professional for that matter) will take Continue reading

Should you buy or should you rent?

Should you buy a home, or should you rent one? It’s a question that many people struggle with when it comes to making a real estate decision.

You may think it just comes down to money: if you have enough money, buy a home, but thinking about it in more detail is a much better way to approach it. Here are a few things you should consider:

Where Are You in Life?

By looking at where you currently are in life, or where you want to be, you can get a better idea of what’s a better fit for you real estate-wise. If you’re travelling a lot, then renting can be a much better option. In that situation, renting a condo is Continue reading

KEYS TO FINDING A GOOD DEAL ON A HOME

You probably know how to find good deals on clothes, flights, and maybe even a used car. But a house? That’s uncharted territory. Fear not, future homeowner…

COVER YOUR BASES

Finding your home sweet home is a process that begins with a mortgage pre approval. Getting pre-approved for a mortgage puts you at an advantage because it means that the lender is confident you can make the necessary payments. Use your realtor as a resource to establish what your loan options are and then connect with a lender that fits you.

Continue reading

Is your Real Estate Agent working for you?

Is your realtor working hard enough so that your house gets the exposure that it needs to attract buyers that are looking. It’s important that you know exactly what your realtor is doing to advertise your home. Don’t be afraid to ask the hard questions afterall this is your home and the goal is to have it SOLD.

The Best Way to Approach This Topic with Your Realtor

No one wants to feel as though someone is bossing him or her but you did hire your Realtor to do a job. That job is to work on getting your house the exposure it needs to sell. If you have a Realtor who isn’t putting the effort that he or she needs to, you are the one who remains stuck in a home you can’t sell.

The best way to approach your Realtor about what methods he or she is using to advertise your home is by making suggestions to open up discussion. For example, you could say you heard that some of your neighbors had luck with an open house. See what your Realtor’s reaction is and then use that as a lead into, “What else can we do to increase our exposure?” By not using the word, “you” you avoid finger pointing and bossiness. Instead, you are implying that it’s a team and it takes some of the pressure off the situation.

If you don’t get anywhere with this approach. You may just have to come out and say, “What types of methods of advertisements have you used for my home?” If your Realtor answers by saying that he or she has placed it in real estate books and magazines, ask to see them. You can mention that you would like to keep some for a keepsake, pass out to friends and family and/or to do some advertising on your own.

If Your Realtor isn’t Working for You

Check your contract for a way out so you can find another Realtor that will do a job that you are satisfied with. If you are unable to get out of contract with your Realtor, contact the realty office to speak to his or her supervisor. Keep in mind that this might spoil your relationship you have with your Realtor, so only do this as a last resort. The best way is to handle it with the Realtor and work together because you both have a common goal…selling your home.

Co-Owning Your Way to Vancouver Home Ownership

It’s no secret; buying a home in the Vancouver can be really expensive and it doesn’t seem to be getting any cheaper, but if you’re a young, first-time homebuyer, that doesn’t mean that homeownership should be, or is, out of the question for you.

Have you considered co-ownership? Buying a home with friends or family is a fantastic way to go about purchasing a home. Co-owning a home isn’t a new concept; people have always been able to do it, but because of higher real estate prices, it’s becoming a more popular solution for people. If you’ve never considered it before, here are a few reasons why you should:

Life Will Be Less Expensive

You’ll be splitting everything between the number of people you own the home with. So that means cheaper monthly costs for utilities, cable, property taxes, and of course, mortgage payments. If an unexpected repair comes up, or if you decide to take on a home renovation project, you’ll be saving money there too. If you’re a little creative, there are other ways you can save money as well. For example, maybe you’re buying with someone that can help you out with babysitting or shared meal expenses.

A Bigger Home, In a Better Neighbourhood

Want to buy one of those newly built, ultra modern homes in an up-and-coming area? Didn’t think it would be possible for you to afford it anymore? By purchasing a home with more people, you’ll probably be able to put down a bigger downpayment and afford a larger mortgage payment each month. That means, a home that you didn’t think you could buy is suddenly back within reach!

It Only Needs to be Temporary

Just because you buy a home with your best friend, cousin, or even your parents, it doesn’t mean you have to live with them in this situation forever. Co-owning is a fantastic way to get into the real estate market as a first time homebuyer. If you make a smart investment when you buy the home, it could be worth a lot more in a few years. If you plan to sell at that time, then you can cash in on the equity you’ve built, split it with everyone involved, and use that as a downpayment for a home that you own on your own.

Is Co-Ownership For You?

Buying a home with other people isn’t for everyone. There are certainly a few risks when it comes to co-owning a home, and you’ll want to be very selective about who you purchase with. But if you can handle it, it’s a smart way to get into the real estate market.