Buying the Home Everybody Wants
Real estate in York Region is on track for a very busy spring market.
For the moment, it still remains a seller’s market, inventory remains low, and the competition is fierce for buyers, even during the pandemic.
This leads many to question what prompts multiple offers, and how do you win a bidding war?
Sellers can only hope to receive multiple offers on their listing. However from the buyer’s perspective, it can be a frustrating and emotional experience. When you look at the bigger picture of a home purchase, “winning” is relative to the buyer’s goals. If the only objective is to buy a specific home, then offering the highest possible purchase price with no offer conditions is the way to go. However, most homebuyers have other goals in mind, such as buying within a specific price point, and a defined timeline for closing the deal and moving in. Then there’s the home itself. Does the buyer intend to fix and flip it? Demolish and build? Or are they seeking a move-in-ready home? Whatever that goal is we can help strategize on how to reach it.
Part of our job is to approach the transaction in an objective way. This includes the process of real estate bidding and negotiating. To that point, remember that just because someone outbids your offer doesn’t necessarily mean you should volley back. As professional experienced real estate agents, we know the local market and can help you keep your eyes on the prize – which is a home that suits you, your budget, and your long-term goals.
In such a competitive situation, what should you do if you really love that home? Obviously, you’ll need to move quickly and make some fast decisions. You may very well become interested in a property for sale that someone else is also considering. In fact, there may be several other buyers entertaining the idea of making an offer.
Here are some strategies to help you make a smart bid and if all goes in your favour, a wise purchase.
Know your budget. As a homebuyer, knowing how much you can spend on a home is key. Getting a mortgage pre-approval can provide valuable insight, and this step also guarantees your mortgage interest rate for up to 120 days. When you’re ready to make an offer, despite your eagerness to win the war, so to speak, do your due diligence and consult with your lender before making a firm offer. The last thing you want is to have an offer accepted and find out it is beyond your budget. That’s why it’s a good idea to arrange for financing before you go home shopping.
Know the Value of the Home. Aside from your budget and the amount you’ll need to borrow, also consider what the home is really worth. You want to make an offer that is so enticing to the sellers but we will pull recent sales stats, giving you valuable insight on the selling price of comparable homes in the same neighbourhood and under the same market conditions and use those as a guide for your offer. This can help you determine an offer that you’re comfortable with, and whether it even makes sense to compete against other buyers.
Reduce your offer conditions. In a seller’s market, having fewer conditions on your offer can work in your favour. Flexibility on your desired closing date or inclusions could be enough to tip the scales in your favour. In a seller’s market and especially in a bidding war, a clean offer is more likely to win. With that said, you may want to inspect the home if necessary before the offer date to put your mind at ease and obtain a satisfactory home inspection by a professional. Keep in mind that in a seller’s market, even if you discover issues with the home, you may still not have much negotiating power. However, having this information will help you decide if the home is worth what you’re expected to pay.
Beyond the home itself, keep in mind that location is a huge factor in determining a home’s value. Premium neighbourhoods come at higher prices, thanks to proximity to amenities, green space, transit routes, shopping, services and other factors. Whatever is drawing people into the area is also likely a factor in driving up the selling price.
The ideal offer in a seller’s market will feature
- No conditions
- A closing date that’s convenient for the seller.
- A deposit amount that shows you’re a serious buyer.
- Acceptance of any of the buyer’s “exclusions”. (For example, they may want to take certain drapery, chandelier or appliances.)
- Evidence you can get financing. (Many lenders offer a “Mortgage Pre-approval Certificate”.) Please obtain one if possible before putting in an offer.
At this time, avoid adding other conditions, such as “subject to financing approval” or “subject to the sale of buyer’s existing property”.
If you want to increase the likelihood that you’ll find — and, more importantly, get — your next dream home, call us directly at 416-998-9891 and have MEandANG Real Estate by your side.