Multiple offers can be the most stressful way to buy a property. When the Metro Vancouver real estate market was red hot last spring, there were multiple offers for desirable properties. And even some not-so-desirable ones. Multiple offers can be great for the seller; not so much for the buyer. Unless you’re prepared.
1. Know your numbers
While it’s always good advice to get your mortgage pre-approved by your lender, it’s especially important if you think you’re going to be getting into competitive multiple offers. You want to know exactly how much money you have available and how high within that budget you’re willing to go. Being pre-qualified also shows sellers you’re serious.
2. Do your research
Work with your realtor so you have a firm grasp on the local property market. Research similar homes in the same neighbourhood to see what they’re selling for. This is called a comparative market analysis. Knowing the range of prices for nearby properties will give you an idea of the range of offers you could expect from other interested buyers.
3. Be certain
Don’t get into multiple offers just for the thrill of the chase.
You need to be certain the property is right for you. That means the home itself ticks all the boxes you desire. And so does the neighbourhood and community where it’s located. Take the time and effort to check out the nearby schools and daycares if you have kids, your access to transit, the commute to your job, parks, crime rates and any potential issues with future developments.
Visit the home again, if there is an opportunity. Go through it with a critical eye to ensure it meets your needs. You want your second or third impression to be as good as your first.
When a property attracts multiple offers, it’s going to be stressful for all the bidders; you want to make sure it’s worth it.
4. Timing is everything in multiple offers
We often hold “sneak peek” open houses on a weekday evening before a new listing’s first weekend open house. That’s the time to pounce, if you think there’s going to be multiple offers for the property you want.
Getting into a property before the weekend open house rush can give you a chance to talk to the agent in a more relaxed setting so all your questions get fully answered. It’ll also buy you a few precious hours to carefully consider your opening offer, do a little more homework like getting a title search done, determine if there may be an oil tank on an older property, get your financing finalized.
5. Keep your offer simple
In multiple offers, the highest number doesn’t always win. A seller that is keen to get the deal done will often look past the dollars and cents to ensure the best offer is clean, with no financing hiccups that could derail the transaction. They also won’t want to see conditions that could delay the sale, or end up costing the seller money.
6. Be flexible
If you’re in a bidding war of multiple offers, try to structure your offer so it meets as many of the sellers’ needs as possible. After all, they’ve got the decisive upper hand.
The seller could need a longer closing date to give them time to find a new home and pack up their things. Or they may want to get things over with as quickly as possible.
Doing as much as you can to ease the seller’s stress could give you the edge, even over higher offers.
8. Don’t be afraid to stand out
Submitting an offer that’s an odd number and still within your budget could help it stand out from other offers with neat, rounded numbers.
Another strategy is to include a personal letter or family photo with your offer; personalizing your offer may make it harder to turn down.
You can also strengthen your offer by attaching bank draft for a five per cent deposit; a 10 per cent deposit will make your offer even stronger.
9. Trust your realtor
Presumably if you’ve gotten to the stage of writing offers on properties, you’ve developed a relationship with your realtor. You’ve discussed your needs, your budget and your financing limits. You trust them to represent your best interests in a bidding war of multiple offers. Even if that means conceding defeat.
Just make sure you’re available by phone when offers are being presented; your realtor may want to tweak yours to get it accepted. At the end of the day, there’s no magic formula to ensure you’ll win a bidding war for the home you want. Sometimes sellers will follow the money and take the highest offer. Sometimes they’ll want to know a little about the buyers and they’ll favour one with whom they sense a connection. Sometimes it’s impossible to know what factors a seller will consider when they choose a winning offer. But if you’ve done your homework and followed these tips, you can be a solid contender in any multiple offers.
Listen to The Garbutt+Dumas Real Estate Podcast on Dealing with Multiple Offers: Sellers Perspective and Dealing with Multiple Offers: Buyers Perspective