Bidding Wars in Toronto’s real estate market and how to win them!
It’s the Spring market in Toronto so Sellers have their homes and gardens all landscaped and ready to list. This is the best time to showcase homes as flowers are blooming and the grass is green. Buyers are out in droves and you know what that means … BIDDING WARS!
You heard of them all over the headlines, but what do they actually mean? There are two ways for a multiple offer to take place. One scenario would be when a Buyer is interested in a property and finds out there is already an offer on the home and they want to submit an offer as well. This is not planned and takes place because there just happen to be two buyers wanting to make offers on a property by chance.
The second scenario and the most common for the Toronto market are the multiple offer situations that are created by the listing realtor. This practice is used when the housing inventory is low and demand by buyers is high. Typically the listing realtor will list a house and not take offers for a week and just allow showings. An offer date will be established where all interested parties will present their offer while the Seller will be in the driver seat and be able to choose the best offer as they see fit.
As you probably realized there is only 1 winner or 2 if you are including the Seller. Competition is fierce and it may take a while for the next house to pop up in the same neighbourhood that matches your criteria. Remember that if you were to participate in a multiple offer situation and you don’t win because you weren’t willing to pay the higher price tag, a new bar has been set and if you want in that neighbourhood, you will have to pay ABOVE the new bar!! This is a very IMPORTANT fact to keep in mind. So essentially bidding high now will save you money in the long run.
Here are the top 5 things that may help you win that bidding war :
1 - Try to match the Seller’s desired closing date. Even with a higher priced offer, the Seller might need you to close on a certain date that matches his future plans like the purchase of his new property
2 - Bring a certified cheque or bank draft for the deposit with the offer. If you have a similar offer to a competing Buyer and you have deposit right there and then and they don’t, the Seller is more likely to choose yours over theirs. This is when size matters - the bigger the better. This shows the Seller that you are VERY serious.
3 - Perform your home inspection before the offer date. This way you won’t have a home inspection clause in your offer as you already did your due diligence. Remember that Seller’s love firm offers as it pretty much guaranteed that you are going to buy the house.
4 - Make sure your financing is in order so that you can avoid some unsuspected hiccups along the way. Be sure to check with your lender and realtor on this one as they should be able to help guide you through this.
5 - Work with an experienced realtor. This is a very important one as this could mean being completely blown out of the water as your advisor may not have been through enough or any multiple offers themselves. It would a shame to find out that you were their guinea pig as they are just starting out. Experience really matters as sometimes you are bidding against really seasoned agents that knows the market and the whole process.
It’s a zoo out there and you will need every little ounce of help. I hope you found these tips helpful and we are here for any advice that you might need. We’ve been through a lot of multiple offers on both sides of the table and will help you get the slight edge to become the winner!
Contact us anytime for more information at firstname.lastname@example.org