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How to Win in Multiple Offer Real Estate Bidding Wars
With the shortage of inventory of homes for sale, the Ottawa real estate market remains quite hot keeping it a Seller's market through this fall season. This means that many buyers are competing for homes where they are bidding in multiple offer situations. So what can you do to ensure that you win when you are in a multiple offer situation?
Of course the price you are going to offer is important. I am often asked by my buyers how much they should offer. This is a great question, but there is no easy answer. Historically Ottawa has been a very stable market, but given the recent lack of inventory of homes for sale in the market, looking at past historic sales for comparable properties is not really relevant. No matter where in the world you are from, real estate prices always go up, and right now prices in Ottawa are definitely going up which is why so many homes are selling for over their asking price. So the answer to this question of how much should I offer, is really how much are you comfortable paying for the property? It just comes down to how much a Buyer is willing to pay. As a Buyer, you will be advised of how many offers have been received as they start coming in. If a property has ten offers on it, you can be certain that offering anything close to the asking price just won't cut it.
But price is not the only factor that comes into play in multiple offer scenarios. The Sellers will also consider the closing date. If the property is vacant, it's important to understand that the sooner the closing date the better it will be for the Seller. If you're thinking of putting in an offer with a closing date of three or four months down the road, forget it! A vacant property has carrying costs for the Seller that make it appealing for them to accept a strong offer with a shorter closing date. The next thing that a Seller will consider is what conditions are being put into the buyer's offer, and the general rule of thumb is that the fewer conditions the better. While this may not always be an ideal situation for Buyers, a Seller will prefer to have a firm deal when accepting an offer. This means an offer that is not conditional upon mortgage financing or property inspection reports. While I don't recommend that Buyers waive these conditions, it is often the winning factor when submitting an offer.
Finally, a Seller will also consider the amount of the deposit being paid into Listing brokerage's trust account upon acceptance of an offer. This will be an important factor to consider if the mortgage financing condition is being waived. The Seller will know you are serious and committed to purchasing the property when you have a large sum of money in trust.
Some of the hottest neighbourhoods in Ottawa where multiple offers are now the norm, are the Glebe, Kanata and Barrahaven. If you're thinking of buying in those areas, I would love to represent you during the real estate purchase transaction. I will be sure to set the right expectations for you and to set you up for a successful and stress free purchase.