Toronto’s real estate market is the fiercest it has ever been. Almost every house that comes on the market are “holding back” offers for a week. This strategy is used by Sellers and Realtors in markets that have very short supply and lots of demand. The Seller will usually put the house on the market at a list price that is below market value. They won’t take offers for a whole week while the house is being shown to prospective Buyers. Once the offer date is here, all interested Buyers will bring their best offer to the table in hopes that the Seller chooses theirs.
To win these bids, you will have to usually bid very very high and sometimes even over the “perceived” market value of the house. A poll by the Real Estate Council of Ontario found that 57% of Toronto and surrounding area Buyers would exceed their maximum budget. I have seen this first hand with some of my Buyer clients.
- 38% said they will go over 20% over their maximum budget to win a house
- 33% of those Toronto area buyers would submit an offer without knowing if they will get approval for financing (we don’t suggest this)
While we never suggest removing any conditions, there are ways to lessen the risk. This is by completing your due diligence before the offer date. Home inspections can usually be performed before the offer date so that condition can be removed with the offer. Financing is a tough one, but getting a solid pre-approval will help and 100% have a good mortgage broker on your side. This will be night and day if you have a solid team backing you up.
Buying a home in Toronto is definitely not easy but the reward of being a home owner trumps all the trials and tribulations that come with buying a house.
For more tips on winning multiple offers check out this LINK.