You could not have dreamt up a more perfect house than this one. You will never be the same if you don’t get this house. It’s perfection with a capital P. It’s so wonderful, in fact, that two other couples want it, too. So what is an eager house hunter to do?
That depends on your bank account and your personality. Do you have the extra funds often required in a competitive bidding war that almost always send up the price tag? And can you stomach the suspense, the churning anxiety and the utter disappointment that invariably comes with defeat? Being involved in a bidding war is an emotional roller coaster ride not for the faint-hearted.
A recent BMO Home Buying Report indicated that most Canadians would rather walk away from their dream home than get lured into a bidding war. Only 28 per cent said they would fight for a house. Of first-time buyers, 39 per cent were more inclined to pay above list price.
Bidding wars typically happen in hot real estate markets such as Toronto and Hamilton.
Let’s explore the ins and outs:
Know what you can afford before shopping – You don’t want to get caught up in the drama and risk spending more than you can afford. That’s just silly. So have a set price and stick to it. You should also know the market value of homes in the area so you don’t get stuck over-paying on a house, no matter how beautiful. Your realtor can help with that. Also, try to cough up a larger down payment than the typical one to five per cent. That shows the purchaser you’re very serious and invested in this transaction.
Keep it simple – The fewer conditions, the better. Now is not the time to request that they accept your offer once you sell your house. Conditional offers that depend on financing approval don’t cut it when other offers are on the table. In fact, if your offer is relatively clean this may be the tipping point for the seller to select you over other offers.
First offer – Make it your best because you may not get another chance. While at it, try to come up with a sizable deposit to show you mean business.
Be flexible – If a seller has already purchased and you meet their closing date that could net you the house over a higher competing offer. In an effort to stand out from competing offers try to only ask for those extras included in the listing. Also on this point, try not to nit-pick on minor repairs and instead offer to purchase the property as is.
Emotional flattery – Sometimes emotions do work in a real estate transaction. So write a letter to the seller about why you love their home and how you envision your family living there. Believe it or not, that may be the way to score the house. Don’t be insincere because they will smell it a mile away.
Rob Golfi of The Golfi Team is a Sales Representative with Re/Max Escarpment Realty Inc, your real estate expert servicing the Hamilton, Stoney Creek, Grimsby and surrounding areas. You can contact Rob at email@example.com