6 Smart Ways To Make Sure You Win A Bidding War
Have you looked around Vancouver recently? The reason there are so many high rise buildings going up in the city is because there isn’t a lot of space for real estate development, but still a very high demand. Our beautiful city is consistently rated one of the best places in the world to live, so it’s not surprising to see competitive for properties. While the market is currently considered balanced, there is still a lot of buyers vying for a limited supply of units. So getting that condo with a great view or snagging that home in the west side away from traffic comes down to a few fundamentals.
1) Make Sure Your Finances Are In Order
When you are thinking about getting into the market to buy a property, the first thing you need to think about is the financial viability of the purchase. Get pre-approved for a mortgage, and make sure there aren’t are scary surprises on your credit report. If you need to get anything sorted out, do so as soon as you possibly can. This will make sure you don’t end up bidding on a home that you can’t afford. Keep your agent informed on any changes in your financial situation. The bare minimum to put down is 5% of the purchase price, but if you can afford 20% down you will be able to avoid paying the CMHC for default insurance which can be costly. Making sure that you are flexible and having the financial pre-approval shows sellers that you are a serious potential buyer. If you end up in a bidding war and you don’t have the pre-approval sorted out and the other party does, chances are you will lose.
2) The Early Bird Gets The Worm
This age old adage applies to the real estate process as well. If you are in a competitive portion of the market, you’ll want to make sure to view a sought after property quickly. The sooner I can arrange a viewing for you, the sooner you can process the details and make a decision on whether or not it’s a good fit for you. It also gives you the opportunity to view the property a 2nd time if necessary. Seeing a home for the second time gives you the chance to inspect it a little deeper and see if there are any items you missed the first time around.
3) Hire A Professional Home Inspector
Even though all British Columbia listed homes need to include a Property Disclosure Statement there is always the possiblity that the current owner is unaware of an issue facing their property. When it comes down to it, it never hurts to have a competent home inspector have a look over the unit. After all it’s not exactly a small purchase, it’s important to cover all your bases. I can connect you with some great inspection companies throughout the city, it’s important to have everything in writing and fully documented. If you are able to avoid putting the home inspection as a condition of the offer, this can put you in the drivers seat when you are in a bidding war.
4) Have Your Deposit Ready To Go
Once the seller gives you the green light and accepts your offer, you need to provide a deposit of a minimum of 5% of the purchase price to proceed with the transaction. A certified cheque or money order is needed to prove that you have the funds available to continue the process. Coming to the table prepared increases the chance the seller will accept your offer over another.
5) Comparing The Price To Other Homes In The Area
Have a look at other properties in the neighbourhood or building that you are looking at. Is the listing you are interested in priced accurately? Before we submit an offer I will do an analysis of comparable homes in the area to make sure we don’t submit a bid that is over market value but also within the seller’s likely minimum negotiating level. If we are in a bidding war, we’ll want to make sure to remove emotions from the process and make a smart, sound offer.
6) Make Sure You Are Motivated!
Even though I always suggest removing emotions from the negotiating process when possible, it’s important to have a strong motivation to want to win a bidding war. We’ll always keep our cards close to our chest, it’s important to never let the opposing party know your position. If you think the home is the perfect one for you we’ll make sure to submit a bid that is the best possible. If the seller is being unreasonable and values their property too highly, it’s also important to be able to walk away.