In this crazy Vancouver Real Estate Market when there are less home sellers and high demand for housing, bidding wars become the norm in many areas. For buyers, this can be a stressful issue that comes with its own set of dangers, especially if you end up paying way too much for a home. With listings at an 8 year low demand is high with low supply. This has led to many scenarios where Vancouver homes are getting hundreds of thousands of dollars over the asking price.
If you arm yourself with the right information, however, there’s a good chance that you could win in a multiple offer situation without simply having to overpay.
Here now are some tips on how to win in multiple offers:
Multipl Offer Tip #1: Research the area
Understanding the area by researching the neighbors, schools, parks, demographics and the crime rate can give you an advantage regarding knowing the value of the location and can also be used as a great conversation starter with the seller.
Sometimes you may not like what you discover about the area, at which point, you would not bother with a bidding war. Assuming that you are happy with what you uncover, this is great information that will assist you in making a sound offer.
Multiple Offer Tip #2: Talk to your mortgage broker
Find out well in advance how much you can really afford to spend on a home; the last thing you want to do is win a bidding war and then discover that you won’t be able to make ends meet in the long term. Get your maximum amount, but don’t give away your cards to the seller off the bat. This also will arm you with an offer where there is no financing clauses leading sellers towards your offer.
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Multiple Offer Tip #3: Do your pricing homework
Too often, home sellers deliberately list their homes anywhere up to 25% under market value with the intent of creating a bidding war. It is up to you to do your homework and find out what the real market value of the properties are in the area. Remember that what a home sells for is not always what it’s actually worth. Vancouver Real Estate has been on the rise and home sellers are now pushing the price higher and higher with every new sale.
Multiple Offer Tip #4: Get a home inspection beforehand by a certified home inspector
Oftentimes, homebuyers make an offer to purchase with conditions like having to sell their own home first or pending home inspection. If you want to to win a bidding war, have a home inspection done before you make your offer. This way you have one less condition and the home seller may give you preferential treatment. Yes you do have to spend the money on the inspection without the certainty you will be getting the home. But it is the best way to position yourself – and protect yourself.
Multiple Offer Tip #5: Avoid the fax/phone process
If possible. Have your Vancouver Realtor present the offer in person. Phone and email is informal and your agent can always sell the story. However, if the price is well below any competitors the story won’t help!
Multiple Offer Tip #6: Have your deposit ready
A bank draft or certified cheque of 5% or more is standard for any real estate transaction in Vancouver. Have this prepared the day you are making the offer leaving no uncertainty for the seller.
Multiple Offer Tip #7: Make your offer the last one
If you place your bid too early in the day, you give the seller time to generate other offers by using your bid as leverage. If you place your bid late in the day, however, that may not be the case and the seller will have a shorter window in which to generate other offers.
Multiple Offer Tip #8: Sell yourself
Even if they are selling their home, oftentimes home sellers care about who is about to take over their property and want to feel assured that they are handing it over to someone who will take good care of it. Explain to the seller how you plan on doing just that. If they have a strong connection with the home let them know you won’t tear it down, if they love their condo let them know you will do the same and not rent it out…
Multiple Offer Tip #9: Be flexible
When trying to win at multiple offers let the home seller know that your dates, terms and anything else that helps are flexible. That way, if it comes down to you and some others they know you have some movement.
Follow some of or all of these tips to help you win at multiple offers in Vancouver!