The current reality of real estate in the GTA is that of a seller’s market, meaning there is an imbalance with more home buyers than home sellers. This gives the sellers an upper hand as buyers compete with each other to make the best offer. As a result, there can be bidding wars. Here are 5 tips on how to win this war.
1. Get pre-approved. A pre-approved mortgage will give you more confidence in your buying power by discussing your financial realities with your lender. Having a pre-approved mortgage is also important if you don’t plan to include a finance condition in your offer.
2. Understand the sellers' needs. The strategy isn’t necessarily about beating other buyers as much as it is catering to the seller’s needs. This can be done by understanding what contractual components are important to the sellers, such as closing dates.
3. Have fewer conditions. By having fewer conditions, you could give yourself an upper hand from the seller’s perspective. This could be not including financing or home inspections. However, in the end a firm offer will usually win over a conditional offer.
4. Include a large deposit. If you put down a larger deposit than the competing bidders, you may gain an advantage as the seller may have more confidence in your purchasing power.
5. Make a strong offer. What constitutes as a strong offer differs depending on which neighbourhood you are buying in. But, there are usually trends that can be analyzed by looking at historical bids. It is important to discuss these trends with your real estate agent to know what offers to make.
Photo Courtesy of American Advisors Group