How to win your dream home with competing offers
In this market, many home buyers are finding themselves losing the home they want to purchase due to multiple offers being presented simultaneously, which, of course, is the desired situation for sellers to receive the best possible results. Do you know what it takes to be the best offer? Are you prepared to write a clean offer? Or more importantly, are you familiar with the term “clean offer”? These are crucial questions to know and answer, because it’ll determine if your offer will get accepted among the rest.
Would it surprise you to know it is not always the highest price that wins?
Although the winner is usually the most qualified home buyer with the highest price and the fewest strings attached, there are some other secrets to winning the home. Not all sellers are fixated on just the highest price. Think about it, a buyer offers $50,000 over the asking price but they are ‘subject to financing’ so they might not even have a pre-approval in place & they might not even know what they can afford. Then they find out they don’t have any bad credit but have never established any credit, so they don’t qualify. Their offer was on the surface may seem enticing but it doesn’t hold up under scrutiny from the bank…
The winning buyer in a multiple offer presentation is often the one who makes the highest and clean offer. When market values are rising, as they are in this current market, there may be a bit of guesswork involved in pricing. You will likely need to pay more than yesterday’s comparable sales in order to be the successful bidder. In many cases substantially more.
A clean offer means that it has few conditions if any, which means certain subjects must be satisfied prior to writing and presenting an offer. In a more relaxed market it is common to see subject to title search, strata documents, financing, inspections and in rare cases, the sale of another home. In most cases there will be multiple ‘subject free’ offers so anything less will not get you into the conversation at the sellers’ table.
Request a Pre-Inspection
Home buyers who know they have competition may have properties inspected before an offer is made. If the seller is allowing pre-sale inspections, which may be in their best interest to do so, we will book an appointment to have your inspector through. If the 1st showings are during an open house, bring an inspector with you when you view the home. This will enable you to make an offer that doesn’t include ‘subject to inspection’.
Get your Financing in Place
Although you will not be able to get completely approved for financing on a new home before you make an offer, you can get pre-approved. Contact your bank or your mortgage broker and submit your application before writing an offer. The mortgage application is one of the few tasks you can address prior to finding a home you would like to purchase. Make sure the approval is thorough & that it as well isn’t subject to conditions outside of approving the home. If it is subject to reviewing all you employment information, source of down payment or gift money, credit check, repayment of loans etc, then you still have a lot of work to do. Sometimes tracking down employment history or payment history of loans can take days or weeks. Your goal should be to be able to write an offer without a ‘subject to financing’ clause.
Sellers & their Realtors will want to see a minimum of 5% deposit, plus the more the better, the stronger your offer will appear to the seller. Showing you have more than a five percent down payment shows the strength of you as a buyer. Upon presentation, if you are able to show you have a bank draft in hand ready to be deposited into your Realtor’s trust account once the offer is accepted, it can support your position as a bona fide serious buyer.
Title Search, Property Disclosures & Strata Documentation
Finding out all we can about the property before writing an offer will help you know if it is right for you. It is important to get copies of any existing reports and seller disclosures. View the title search and make sure you investigate anything suspicious. In many cases you will be able to receive all the strata documentation prior to your offer on a condo or townhouse so it will give you more time to make any inquiries that you deem important to you. This will enable you to write an offer without these subjects.
Finding out much as much as we can about the home sellers and their situation will help us tailor the offer to their needs. Let the sellers know how much you love their home. Write a letter about why you would love to live in their home. Some sellers are influenced by emotional appeal, particularly if they’re looking at multiple, similar offers. Finding out when the seller wants to move allows us to offer them the dates they want or need.
Trust our advice and guidance. We have the ability and knowledge to influence and impact your chances of winning in a multiple offer situation. We do this for a living, are experienced & we want to see you in your dream home.