What’s a Bidding War and How Do I Win One? Part Two

You’ve done your research and are as savvy as you’ll ever be with your buying-know how – but wait, there’s more to consider before you make that offer. Here are 5 must-have tips on how to gain the upper hand in a bidding war.

1. Book more viewings. I have to admit that I am a terrible at being a good judge purely basing an opinion on first impressions. There are tons of people who I’ve disliked upon first meeting but later got to know and ended up very close friends with. On the flip side, there are many times that I’ve seen a gorgeous blouse in a store that I had to have but following my “go back later and if it’s still there you can get it” rule, lost it’s luster. With a house it’s even more important to go for more than one viewing to confirm your initial reaction. And who knows, maybe the chance to chat up the owner a few times may gain you valuable intel to win the bid.

2. Sweeten the deal. Sometimes there are more things to consider than just the dollar figure. If another bidder is offering only a slightly higher number than you, you may be able to edge them out by adding some small but much appreciated incentives. Perhaps there is a specific closing date that you are willing to accommodate or you can offer to pay for all of the closing costs. There might even be a difficult to move item in the home that you want to buy along with the house – saving them the hassle. A gesture that helps make the sale easier for the owners can gain you the upper hand.

3. Stand out. When you’re in a bidding war and you are able to afford more than the asking price, it doesn’t hurt to extend some more, even if it’s not a large number. You may think why bother bidding a thousand plus dollars over the asking price but your odd sounding number may actually stand out and better yet, squeak past the other bids without taxing your budget much.

4. Do the math. If you can strategically calculate the highest bid to beat then you’ve created an edge for yourself. Start by knowing the true value of the house – your realtor and the home inspection should help you out with that one. Then by taking your maximum loan value and comparing it to the difference from what the asking price of the house is, it may be smart to offer more than the fair market value but less than your maximum budget.

5. Be cool. Don’t forget that this whole endeavour is about getting your dream house – not beating out the contenders. It’s not the best idea to buy a house you can’t really afford or one that isn’t what you really want. A bidding war can be like a competition where the heat of the action can make you feel like you want to take on more risks because you want to win. But remember, it’s not a game. Be logical and be careful. Most of all, establish what your threshold is beforehand so you can also be prepared to walk away.

About Aaron Joshua Barroso

Marketing at Zoocasa, Brokerage.

What’s a Bidding War and How Do I Win One? Part One

Oh no, you’ve finally found the PERFECT house after 18 months of laborious searching and you’re ready to put an offer in — but so is somebody else! Here’s the first in a two-part serious about being prepared to deal with a bidding war situation. The following are some tips to get you ready to for battle.

1. Suit up
Two words: Mortgage pre-approval. Picture it, next week, this year – it’s a beautiful day, you’re walking to meet the sellers with a spring in your step and a confident smile. Why? You have a pre-qualified loan certificate, which proves that you’ve got money to back up your offer. It says that you are serious about buying this property.

2. Scout the scene
There’s a reason why scouts are sent to survey the battlefield – you’ve got to know what you’re up against. Knowing what the fair market value of the homes you’re interested along with similar houses in other prospective neighbourhoods is a must. You’ll know what you can afford, what you’re able to offer and make a prediction on what others may offer; making it clear what kind of bid you’re ready to put forth.

3. Straight-shooting
Making a firm offer without complicated clauses, conditions or terms will make your bid that much more attractive. Consider the difference between two offers at the same price but one of them includes the condition that the purchaser won’t buy until he/she first sells his/her property. Exactly! Who wants the drama?

4. Knowing is half the battle
Get all the facts before you make your move. The house of your dreams may seem perfect but it’s wise to have it certified as sound by a professional. Plan on for paying for a pre-buy home inspection so you will know exactly what you’re getting. Finding out that the house will require extensive repairs or need to be brought up to code before you make a decision can save you from a lot of future headaches. Read this enlightening article about what your home inspection may be missing.

5. Don’t fall for a decoy
They say that staging a house can lead to bidding wars. Remember that the seller probably has his/her home set to appeal to a broad range of buyers so forget the smell of baked goods in the oven, the fresh flowers and fancy furniture – you’re there for the house. Try to picture it as a blank slate that will suit your belongings and your lifestyle. If you’re really interested in a property why not come armed with the measurements of your furniture to make sure they will fit well? It’s up to you to know if the house is right.

About Aaron Joshua Barroso

Marketing at Zoocasa, Brokerage.