How to Win When Competing for a Home
The weather is warming up, and so too is the spring real estate market. It is still a sellers market, and we are seeing more and more multiple offer situations again with buyers competing for homes. In these situations, it is important to take note of a few tips to help you earn the home you want. This video blog will provide you with the 6 following tips to set you up to win the home you are competing for:
1. Get Financing Pre-Approval
The first step of your home search should be to obtain financing pre-approval. It is important to go beyond simply getting pre-qualified. You want to submit all necessary information to your mortgage specialist, and make sure that they are submitting this documentation to obtain full financial pre-approval for you. In addition to this, it may also be beneficial for you to give your pre-approval letter to your agent to present o the sellers. I can’t tell you how many times I have represented sellers, and the buyer’s agent didn’t even know who their clients lender was. It creates a red flag for sellers, as it shows uncertainty about whether the buyer has financing pre-approval. By offering a pre-approval letter for the sellers and listing agent to view, you are creating confidence in the sellers, and setting yourself up for success.
2. Make Your Offer Work for the Sellers
The first thing you can do is give the sellers their ideal closing date. Quite often the property listing will note what that date is, so it is best to make sure that your offer accommodates the sellers closing date if at all possible. And if the listing does not indicate the closing date, this is something your agent can discuss with the listing agent. Regardless of the price that you are offering, if your closing date doesn’t match up with the sellers ideal closing date, it is unlikely that your offer will be accepted.
The next thing you can do is minimize the number of chattels and fixtures that you are asking for, and only include the ones that the sellers have included in their listing.
3. Offer a Large Deposit
If the sellers are asking for a large deposit, and you are only willing to provide a smaller deposit, the sellers may not take you seriously. They may think that you aren’t overly interested in the home, or possibly that you cannot afford the home. Within reason, it is important to provide a deposit that is equal to, or larger than the amount requested by the sellers.
4. Consider a Pre-Offer Home Inspection
It is always important to have a home inspection, even in multiple offer situations. You want to know that the home is in good condition, and that there will be no major surprises upon closing. If there are a number of offers on a home, it is very likely that one of those offers is unconditional. As such, it is worth considering a pre-offer home inspection. This is when you book and complete a home inspection prior to submitting your offer. The benefit of doing this, is to be in a good position to make an offer without a home inspection condition. The risk to doing this, is that you spend hundreds of dollars on a home inspection, and your offer still doesn’t win. For some homes in certain situations, this may be a good option to consider.
5. Write a Letter to the Sellers
Let the sellers know who you are! Quite often the sellers will select the top offer with the highest amount of money or the least amount of conditions. But if the offers are close, you want to set yourself apart from the competition. Perhaps the sellers have close friends in the neighbourhood, and they wan to leave their home to a family who they feel will fit in well with their friends and neighbours. It is important to let them know who you are, so they can envision you in their home. Let them know that you are a great fit for the neighbourhood, and perhaps include a picture or two of your family. This is a strategy that doesn’t always beat out other stronger offers, but it does set you apart if offers are very close.
Work with a Local, Knowledgeable Agent
It is important to be represented by a local, knowledgeable agent who knows the area, and knows the comparable sales in the neighbourhood. In the past few years the market has increased substantially, and new housing price records have been set on a consistent basis. However, there have been times in which it was clear that some people drastically overpaid for homes. So work with a local REALTOR who knows the market, has access to comparable market information, has been through comparable homes in the neighbourhood, and can give you an educated honest opinion about the value of the property you are bidding on. A local REALTOR will give you a good opportunity to compete for the home you want, but will ensure that you do not overpay for it.
