If your agent tries to upsell you on the price and encourage you to go beyond your budget, it’s time to find a new agent. The job of the agent is to research comparables in the neighbourhood and advise you, but you are the one in control of your money.
An agent can access information that you might not be able to, so use them as a resource and be upfront about how much you are willing to spend on a property. If you’re losing bidding war after bidding war, or you feel that your agent just doesn’t understand your budget and what you’re after, look around for an agent who does.
5. Stand united and strong
It’s human nature to want what someone else has and to want what’s in limited quantity. Accept this but don’t succumb to peer pressure.
Once you’ve set your budget, determine exactly how much you can go over if you end up in a bidding war and stick with it. If you’re first-time buyers and are spurred on by stories of friends who bought five years ago and just made a ton of money selling their home in a bidding war, don’t speculate that you’ll be as lucky in a few years.
The market will correct itself and you’ll likely see the correction come in cottage country and the condo market before it hits urban areas like Vancouver and Toronto. Be careful not to gamble away the return on your investment in a bidding war. Do your research, crunch your numbers and prepare your offer with an agent who won’t talk you into a deal that might cost you more money than you actually have.
6. Keep it clean
Surprisingly, not everyone is after top dollar when it comes to selling their home. I’ve put in a lot successful offers that may not have been the highest, but they were the cleanest.
A clean offer with preapproved financing, especially in a multiple-offer scenario, shows the seller that you are serious. Conditional sales and offers that are contingent on financing just don’t fly when there are other offers on the table. While conditions often get waived in a bidding war, I strongly advise you not to waive the house inspection if at all possible.
Personally speaking, I think that home inspections should be regulated and inspections should be mandatory as part of the buying process. We’ve all heard stories and I’ve seen my fair share of house inspections that have missed significant problems that end up costing buyers big money to fix. No one wants to find themselves in that situation, especially if you’ve maxed out your budget in a bidding war, so try to keep that inspection in the offer if you can.
7. Be flexible
Winning a bidding war might be as easy as agreeing to the seller’s conditions like closing dates, buying a property “as is”, or even offering to move the closing date up if it works better for the seller. If a seller has already bought another property and is anxious to move on, agreeing to make the transition as easy as possible could mean winning over a more generous offer.
Accepting a property “as is” and limiting conditions such as requesting that missing ceiling tiles in the basement be replaced or the broken bedroom window be fixed might work in your favour too. If your realtor is privy to any information about the seller’s situation and if you can be amenable and flexible in any way, take advantage of the opportunity and try to stand out from the others.
8. Dig deep
A significant deposit can show you mean business. A deposit should always be presented as a certified cheque. Have your agent check into the typical deposit amount in your part of Canada because it can vary from city to city.
Put as much as you can afford down, it goes towards your down payment anyway if you get the property, and you get it back if you don’t firm up on the offer. A clean offer with a large deposit in the form of a certified cheque could mean winning the deal over another buyer.