According to a 2014 Globe and Mail article, more Canadians are willing to go into a bidding war to buy a home than ever before. Respondents in BC and the Prairies ranked the highest, with 38% in both provinces claiming they would consider it.
If you find yourself in a situation with multiple bidders, how can you protect your interests as a potential buyer?
When there are competing offers on a home, there’s no guarantee that you’ll win the bid, and it’s important not to get carried away in the excitement of the process.
You may think this is your dream home; the home you can’t live without. Chances are, there are other homes that are just as perfect for you, and they may not have competing offers. Revisiting the house a second time can help you look at it more objectively. Keeping a level head is important; as with any negotiation, if you care at all about getting a good deal, you have to be prepared to walk away.
Ask your Realtor® what the fair market value of the home is, based on similar houses that are being sold in the neighbourhood. Keep that figure in mind as you calculate how much you are willing to bid, and what someone else might realistically think about bidding for it.
Decide on an upper limit
Decide on your upper limit before you start bidding. Any offer you make must be one you can afford to make. At the same time, don’t begin with a very low offer in a situation where there are multiple bidders; you may not be given the opportunity to improve it. Start with an offer you think is fair based on the market value.
Learn about the seller’s needs
Find out what the seller’s needs are around the closing date and accommodate those needs if you can, whether they are hoping for an earlier or later close than you might expect. This could make the difference between them accepting your bid or somebody else’s.
Adding inclusions to your offer that aren’t mentioned in the listing (such as appliances) isn’t a great idea in a situation where there are competing offers. You want to make your bid as attractive as possible to the seller.
The Realtors® at Team Powerhouse Realty are experts in multiple offers and can help you with the process to greatly improve your odds. Give us a call!