While some real estate markets continue to limp along, others have blown up in a big way in recent years. In up and coming areas like Durham Region, bidding wars have become a staple of the market, forcing everyone interested in getting their dream home to brush up on their poker face, improve their attention to detail, and reassess the quality of their agents. Worried you might end up caught in a bidding war—or already on the precipice of one? Then make sure you take these five pieces of advice to heart, lest you lose out in a big way:
Fill Your Pockets in Advance
The earlier you can pool your resources in advance, the better. That means having as much money at hand as is feasible and getting preapproved for as large of a loan as you can get. That’s not to say you need to spend the entirety of the mortgage you’re preapproved for, but it allows you to bump your offer up should you need to. This also can help you feel assured during negotiations that you have money already approved and you don’t have to wait for a bank to approve the sale afterwards.
Hit Hard and Strong
Being the first to make an offer will give you an edge in any bidding war. Make sure the bid isn’t an embarrassment or an insult—this isn’t just a negotiation between you and the seller as it would be in a traditional scenario. If you lowball or threaten to walk away, the seller can easily turn around and accept an offer from a different person. So jump in strong and make it clear that you’re serious about buying the house. This is where getting your cash in hand pays off, especially if you can include a big down payment on your offer, that’s going to go a very long way with most sellers.
We’ve discussed making an impact and gathering funds to win the war, but let’s talk about losing gracefully. No house, no matter how much you love it, is worth bankrupting yourself over. You want to be sure you’re paying a fair price for the home, and not overpaying because the bidding war has clouded judgment or allowed you to fall into a trap. If you can get a good escalation clause in place for the bidding war, that will help immensely to keep things reasonable.
Pay Attention to Your Agent
You should be listening to what your agent has to say about the situation both for its value as objective advice, and to assess whether they know what they’re talking about. You don’t want to continue working with any agent who tries to goad you into pushing beyond your budget. You want to walk away with a win, not give your agent a win while taking an undue burden onto yourself.
Clean Offers Go Further
The more straightforward you can make your offer, the better it’s going to go over with most buyers. That means no conditional clauses: If you want an inspection before buying, pay to have one done in advance of your offer. If you need to sell your house first, get that taken care of. If you’re offering the cleanest purchase, it may not matter if you’re offering quite as much money as other offers.
For more information and to start looking for a house, contact us at Mary Roy and Team today!