How To Win A Bidding War in Toronto?

Bidding WarsYou are one of the fortunate. You have landed a decent job, have managed to save a down payment and understand that buying a home is a great investment that will put you ahead of the game.
First of all, congratulations! Well done!!! You are setting yourself up for a very bright future. Now, the real work begins.
The fist time buyer market is one of the toughest markets in the city. Why? There are more buyers than there is supply, which translates into lots of competition for the decent homes in this market. Bidding wars are still the norm in this market and they require a well thought out strategy and plan.
What is a bidding war? A bidding war is when the agent lists a home, sets up a specific offer date and accepts and reviews all offers on that date. The advantage for the seller is that it is a relatively effective way to get the highest price for your home in the shortest period possible.
For a buyer, you may be wondering how to win a bidding war.  It means that you are going to need to make your mind up on whether you want to bid on the home quickly, and if you decide to bid, position yourself to put you best bid forward.
This means clearing yourself of all conditions in your offer. Have your financing in place in advance and be comfortable with either the building inspection that has been completed or complete your own inspection prior to putting your bid you’re Your agent should review with you the what recent properties have sold for in the area to give you a feel of market price. Agree on what your maximum bid is for the property in advance and be disciplined in only bidding to your maximum.
Again, bidding wars are a reality in this market. Do your homework to position yourself to win and set yourself up with to succeed in this competitive market.

Tips for Making Stronger Real Estate Offers

How to make a strong offer

By Jody Thompson

Buying properties is the essence of real estate investing. It sounds so easy but those first several investment properties seem to evade new real estate investors time and time again. Why? When looking at what it takes to make a strong offer on a property far too many people focus on one thing, PRICE. While dollars and cents are very important, price is only one component of a winning offer.
Put yourself in the seller’s shoes; of course you want to get the most money possible, that’s a given.But what happens when two offers come in at the same price, how then does a seller decide which offer to choose?

  1. Price: we have already mentioned price and it is generally speaking the first thing considered. A seller wants to receive the most money possible.
  2. Odds of Closing: nothing makes selling a property more frustrating than buyers who cannot perform. Sellers want to accept an offer they are confident will close.
  3. Speed of Closing: we are an impatient society and sellers are especially so. Sellers want to close as quickly as possible.
  4. Ease of Closing: the fewer problems and less potential for problems, the better. Sellers are searching for a pain free process.

With these things in mind it becomes a little easier to figure out ways to to make an offer which will appeal to sellers and give you a better chance of landing the property. Here are some ways to make an offer difficult for any seller to refuse:

Tips for Making Stronger Real Estate Offers

  1. Increase Deposit – earnest money (good faith money) is used in real estate transactions to show the buyer’s intent to purchase the property. The amount or percentage of the deposit varies based on several factors but generally speaking a seller will look more favorably at a larger earnest money deposit, as it shows the buyer is serious, supporting number two in the above list.
  2. Shorter Inspection Period: typical inspection periods vary from market to market but 7-10 days is fairly common. However, if you have a working relationship with a good inspector you will need less time to get an inspection completed which means you can shorten the window on the contract. Being able to complete the inspection process quickly and move forward towards a successful closing helps satisfy number three in the previous list and can help defeat similar offers which move slowly.
  3. Pre-approval Letter: while a cash offer is always king, a pre-approval letter from a lender can help ease any doubts a seller might have about your ability to obtain the funds to close on the property, helping satisfy numbers two and four on the above list.
  4. Fewer Conditions: the less you ask from the seller, the better (in their eyes). Many sellers are eager to move on and do not want to fool with dozens of nit-picky requests. If you are confident in your ability to assess and analyze properties, you may consider making “as-is” offers, meaning you will not ask the seller to fix any issues with property. Sellers are usually thrilled knowing they will not have to deal with fixing a list of problems (large or small), potentially making your offer much sweeter than competing offers.

Making offers on real estate purchases can be difficult, but knowing what the seller is looking for and being able to cater to their desires will put you in the best position to get those great deals under contract. While every seller is a little different and each is in a unique situation, most have the same end goal in mind; to get the most money for their asset, as soon as possible and with no delays or problems. While it seems like a lot to ask for, and clean closings are not always possible, if you satisfy as many of those as possible, you give yourself a great chance to land some real estate deals.

If you are looking to buy a home, I would be happy to help.  Please contact me here.

Jody