Bidding wars are common in the Toronto real estate market. With such intense competition and limited supply, buyers are willing to go above and beyond to secure their homes. If you find yourself in a bidding war, here are a couple of things you should keep in mind if you want to come out on top.
Asking Price? Forget About It!
Let’s be honest: the highest price normally wins the bidding war. An asking price is not often indicative of what the seller wants to sell the house for. An asking price can be a strategy for the seller to attract a bidding war or certain buyers. In the current market, listings almost always sell over the asking price, particularly in central Toronto and the average days a listing is on the market has decreased over 23% from last year. In this instance, having a good realtor at your side can make a huge difference.
You’re Not In Control Here
The Seller is the top dog in a bidding war. You have to accept the fact that you can’t make them take your offer in a bidding war. Unfortunately, you aren’t normally in a position of power in a bidding war.
A ‘Winning At All Costs’ Strategy Is Not Always The Best
It’s easy to get carried away in a bidding war. But, you need to have a budget and stick to it. Know your limits and have all of your financials in order before you start. You don’t want to overpay for a property either. Work with your realtor and know what a fair price for the property is.
Adjust Your Mindset About Money
Math plays an important part in these bidding wars. A big number when increasing your bid might seem very daunting but you can break it down and it won’t seem so scary. $5,000 might be a lot but an extra $23 per month isn’t as scary. Some bidding wars can be lost over less than $1,000.
Sometimes You Only Get One Shot
Your first offer is usually the last one you get to make. Back and forth isn’t a common practice in most bidding wars. Your first offer should be strong. Your realtor will be able to guide you.
Be Ready And Be An Attractive Offer
This doesn’t mean putting on your Sunday best. Your offer will be more attractive if you don’t have conditions. If you have firm financing and don’t require a home inspection, you’ll often be a more attractive offer than a Buyer with conditions. You want to be ready with financing and know your limits before you start a bidding war. Have your deposit ready as a deal is legally binding once the deposit cheque is in trust to the listing brokerage. If you have the opportunity to have a certified cheque ready on offer night makes your offer very attractive.
Work Out Your Strategy
Your realtor is your best tool in a bidding war. You need to work with them to optimise your strategy. From choosing the time of your offer, the amount of your offer and organising your finances, so many things will need to be worked out.
A bidding war is a normal part of the Toronto real estate market. Your realtor is your best bet to come out on top. With the right knowledge and experience, you can optimise your strategy to come out on top.
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