According to CBC News, Toronto’s “real estate bidding wars are reaching a fever pitch”. Because of low interest rates, many first-time heaving home buyers are leaving apartment living and branching out into single family homes. This means that you might find the perfect home only to learn that ten other people think it is perfect for them as well. Here is what to do if you get in a bidding war in the Toronto real estate market.
1. Don’t Fall in Love
When you’re shopping for a new home, it’s hard not to get your emotions involved. You are looking at a place and trying to picture your family there for many years to come. It may be the home where you bring home your first child, celebrate that first Christmas and so many other firsts. It’s hard not to fall in love with a house when you feel it is perfect for these moments.
However, being tied emotionally to a house you don’t yet own can cause heartbreak, especially during a bidding war. Either you will be so determined to get the house that you’ll wind up paying way too much for it or you will face a situation where you have to stop bidding because the cost is too high and will be completely heartbroken.
Try to keep an open mind and have a backup property or two on your list in case the first one doesn’t pan out.
2. Make a Clean Offer
Try to make a straightforward “clean” offer. If a sellers has five offers in front of her and four of them ask for various things and yours does not, you may win the bid. Leave off requests such as:
- Asking for items to be included with the house, such as furniture.
- Asking for costly repairs that you can do yourself.
- Have your financing already in place.
- Do the inspection ahead of time so the offer is no longer contingent on that aspect.
- Asking to take possession of the house immediately. It is standard to allow the seller a bit of time to vacate after closing, typically 30 days.
3. Know How High You Can Go
Sit down with your financial advisor and figure out how much of a payment you can afford and what amount that equals based on current interest rates. Having a firm number will help you know how high you can bid on a house.
If you are suddenly in a situation where 10 other people are bidding on the same home, you can throw out your absolutely best offer based on the market, value of the house and what you know you can afford. Your offer may be just a bit better than others. If not, at least you’ll know you didn’t spend more than you can afford.
Still unsure how to navigate the shark infested bidding war waters? You don’t have to paddle through them alone. The Wan team can help you figure out how to not only find the home of your dreams but will give you the best chance of winning that bid.