In Toronto’s hot real estate market, multiple-offer scenarios are relatively common. Appealing properties are bound to attract a lot of interest, which can lead to high levels of competition. While these situations can benefit home sellers, they frequently lead to stress and uncertainty for the buyers involved. Fortunately, there are some steps you can take to improve your chances of securing the highly sought-after home of your dreams.
If you find yourself in competition with one or more buyers, try these five tips for navigating multiple-offer scenarios…
1) Get pre-approved
Obtaining mortgage pre-approval is an important step in the home-buying process. It can also be helpful if you find yourself in a multiple-offer situation. When a lender pre-approves you, it means they’ve looked carefully at your income, assets, credit, and other relevant factors to determine how much you’re likely to receive in financing. With a pre-approval letter in hand, you’re one step closer to obtaining a mortgage than buyers who don’t have one. As a result, many sellers will take you more seriously.
2) Put forth your best offer
When you’re in a competitive situation, it may make sense to offer your highest possible bid right away. While home buyers often operate under the assumption that they’ll get the opportunity to negotiate, this isn’t always the case. In a multiple-offer situation, you should be aware that another buyer may make an offer that’s too good for a seller to pass up. Your agent can assess your circumstances—and help you determine whether making your maximum bid at the outset is the right strategy.
3) Be flexible about your timeline
While money is typically the prime motivator for sellers, other factors can also have an impact on which offer they decide to accept. In many cases, convenience is key. If a seller has to relocate for work, family, or some other reason, they may find the idea of a quick closing very appealing. On the flip side, sellers who want to take their time when they’re moving might prefer a more relaxed timeline. Either way, accommodating their needs could give you an edge over less-flexible buyers.
4) Consider your contingencies
When you’re competing for a property, you may want to consider removing some (or all) of the contingencies included in your offer. Put simply, these are the conditions that must be met in order for a deal to be completed. For example, a home-sale contingency states that you won’t have to go through with your purchase if you aren’t able to sell your current house or condo. These stipulations can hold up the selling process, so removing them may make your offer more appealing to sellers. That said, it’s always a good idea to discuss the potential ramifications of forgoing your contingencies with your agent.
5) Increase your deposit
Another way to make your offer more attractive is by including a sizeable deposit. Taking this step will show sellers that you have the funds to make it to closing—which can work to your advantage when there are other buyers in the mix. Just be aware that in some circumstances, you can lose your deposit. Fortunately, adhering to all of the deadlines and conditions set out in your Agreement of Purchase and Sale will ensure that you’ll get your money back if the deal doesn’t pan out.
Finding your ideal property is exciting, but it can quickly become a stressful situation when there are other buyers involved. Making a highly-attractive offer will help ensure that you stand the best possible chance of securing your dream home.
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