Bidding wars can be a dangerous territory for a buyer to step into, especially if you are not educated or know the intricate elements of the process. Erica Smith and Joy Patterson from The Condo Chicks outline some tips and tricks that will help you in a multi-offer scenario.
1. Choosing the Right Sales Representative It is often too easy to get caught up in the emotional aspect of a multiple offer situation, so it is important to work with a sales representative who has your best interest at heart. It is your representative's duty to educate you on the true value of the property and to advise you when you are reaching beyond not only your budget, but beyond what is fair market value. Remember, there will always be another property that comes up that will meet your criteria.
2. Be Financially Prepared Not only should you have your financing in place to purchase a property, but you should have enough funds on hand for a deposit. In a competitive situation, we always advise our clients to have their deposit ready as it will need to be provided within 24 hours of acceptance. The last thing you want is to be under pressure to free up funds to meet the terms of the agreement.
3. Limit Conditions Simply put- the cleaner the offer, the better. It's always better to do your due diligence in regards to potential conditions prior to entering a multiple offer situation. For example, if you are putting an offer on a home, it is essential to have a home inspection done to confirm that the property is in good shape. It would be a good idea to have the inspection completed prior to the offer date so the condition can be removed. This will result in a cleaner offer and can give you an advantage over competing offers.
4. Respect the Seller's Wishes Everyone knows that the seller wants to generate a bidding war to generate more return for the property. Keep in mind that the financial reward is not always the only criteria that the seller wants met when entertaining offers. Besides a clean offer, the closing date can also be equally important to the seller. To give yourself an advantage, try and stay as close to the desired closing date of the seller as possible. The timing could be more important to the seller than you realize and compromising on this date can give you an edge over the others being reviewed.
The above points are a few tips that can ultimately increase your chances of winning a multiple offer situation. It never hurts to be a little more prepared than not as it could make all the difference when it comes to winning a property in a bidding war.