Competing Offers Part 1: Strategies To Help Buyers Win
Two years ago, I wrote a blog post about strategies for buyers in competing offer situations. Looking back, that really was the start of something that has now become common place with the extremely active real estate market conditions we have here in the Collingwood and Blue Mountain areas. It seems like a good time to recap those suggestions and to add some new ones gained from experience.
While you can’t guarantee success, here are my first five tips you can do as a buyer to improve your chances in a bidding war.
- Show Good Faith.When you make an offer, your deposit shows good faith that you intend to complete the transaction. Consider making a larger deposit than what might be the norm in the market and price range. I recently had an offer come in with a deposit of $100,000. While that may be unusual, it certainly got the sellers attention. If $5,000 is normal in the marketplace, consider making a deposit of $10,000 or more. If your conditions are not fulfilled, the money will be returned to you and, if your sale becomes firm, the deposit forms part of your down payment.
- Make It Personal.A house is more than bricks and mortar. It’s a home where memories have been created and sometimes it is hard to leave. Include a short and heartfelt note to the homeowner telling them why you love their home and would enjoy living there.
- Get Pre-Qualified.It’s always wise to know where you stand with a lender for financing and while I maintain that offers requiring a mortgage should always be conditional on having financing approved, consider sharing a copy of your pre-approval with the seller. Sellers are nervous that buyers are removing financing conditions and then having appraisals completed after the fact. Giving the seller comfort upfront goes a long way.
- Always Have An Inspection.No matter how tempting it may be to “take your chances,” having a home inspection is almost always a must and sellers understand this. If there is enough time, consider having an inspection before making an offer so an inspection condition is not included in the offer. Beware: there is always the risk that you will pay for an inspection and still not succeed in buying the home.
- Every Day Counts.Most offers have conditions and before bidding wars, we usually saw conditions in our local market place running from 7-10 days. This poses a risk to a seller. If the buyer backs out at the end of the conditional period, the seller may have lost other buyers in the interim so shortening your time frames, reduces the sellers risk. If possible, shorten the conditional period and be ready to act quickly if your offer is accepted.
Stay tuned for five more tips I’m writing and will post in the next couple of days.