Multiple-Offer Scenarios: 5 Tips for Buyers
5 Tips That Can Help Improve Your Offer
Multiple-offer scenarios (and even bidding wars) aren’t uncommon in the Greater Toronto Area (GTA) and they can create a lot of stress for the buyers involved. If you find yourself in a competitive situation, you may feel like there’s nothing you can do to improve your chances of coming out on top. Fortunately, that’s not true. Time and again, we’ve seen the power that a strong offer can have when sellers have to make a decision.
If you’re a buyer in a multiple-offer scenario, here are five steps you can take to improve your offer and help ensure that you secure your dream home…
1) Make your best offer first
When you’re making an offer, it pays to be strategic. While there are times when that means leaving room to negotiate, a competitive situation isn’t often one of them. That’s because sellers who have their pick of offers frequently choose the most attractive one right off the top. Since you may not get a second chance, making your highest bid first may be your best bet. Ask your agent if this is the right strategy for your circumstances.
2) Submit more earnest money
Your earnest money is a deposit you’ll submit to show sellers you’re serious about your purchase. It tells them you mean business since you have the funds to make it to closing—and significant dollars at stake. For reference, somewhere in the ballpark 5 per cent of your purchase price is fairly typical in the Greater Toronto Area. Just remember the larger your deposit, the greater your potential advantage over buyers who are offering less.
3) Limit your conditions
Conditions are stipulations that must be met before a home purchase becomes final. They allow buyers to back out of a deal under certain circumstances, like if they don’t obtain financing or satisfactory inspection results. On the flip side, sellers typically prefer offers that are free of conditions—which is why removing some or all of them can make your bid more competitive. If you decide to go this route, make sure you discuss the potential risks with your agent (and ask about strategies you can use to protect yourself).
4) Show some flexibility
For some sellers, convenience is one of the traits that define a successful sale. That’s worth keeping in mind when you’re competing with other buyers. If possible, work with your agent to determine what the sellers want. Is it a quick closing? A more relaxed timeline? In some cases, accommodating these preferences can help ensure that you win out—especially if the sellers need to leave in a hurry, or they’re prioritizing a low-stress move.
5) Don’t forgo pre-approval
While sellers who receive multiple offers are in a good position, they may also experience stress during the decision-making process. It’s understandable since they have a lot to consider—including whether the buyers they decide to sell to will make it to the finish line. If a seller is seriously considering your offer, you can help set their mind at ease by obtaining mortgage pre-approval. Taking this crucial step with your lender shows that you are both financially qualified—and committed to closing!
Ready to buy a home? Reach out to learn how we can put our expertise to work for you—whether you’re in a multiple-offer scenario or not!
