Two recurring issues for buyers in a seller’s market are either: the property you would like to visit already has an accepted offer or you end up in a bidding war on your dream home.
I will go through both of these situations and suggest solutions to these problems.
Let’s start things off with the first issue. You’re scrolling through the internet, trying to find your dream home and suddenly you find the perfect home. In the right price bracket, it has the garage and private lot… You decide to call the listing agent. No answer. You send a text and he promptly replies: Sorry, we have an accepted offer on the property. You think to yourself: What happened? I didn’t see this property online yesterday and now it’s already unavailable!
Here’s what happened.
In this current seller’s market, we often get a ton of showings on the same day the property hits the market. Oftentimes, buyer agents will submit a perfect offer on the first day and give short delays to answer their offer. Under pressure, the sellers usually accept the perfect offer and celebrate a 1 day sale.
It’s unfortunate but quite common. As a real estate agency that specializes in buyers and sellers, we’re quite used to seeing this kind of situation. Here are solutions to this problem and strategies that we suggest to our buyers:
- Set up an automated search engine using one of our realtors. We can customize your search with all of your criteria (ex: type of property, garage, living space square footage, size of lot, number of bedrooms, etc.), down to literally drawing out a map of which areas you would like (ex: I want a property in the Plateau area, but only from rue Prado to Boulevard des Grives). You will receive an email immediately when a new property in your criteria hits the market or if the price changes on a property already online.
- Contact your realtor immediately when you see the property. We can set up the viewing of the property immediately and also receive notifications on the activity of the property. If an offer comes in, we receive a notification and we can either move the appointment sooner or keep the original appointment if it fits within the delays of the offer and decide if we want to compete against the other offer (more details on this situation in the next paragraph).
- Make yourself available for showings. Yes, the market is that fast. If you wait until the weekend on a well priced home, the odds of it still being available are very slim.
Now for the second recurring issue… Bidding wars. Alright, you’ve listened to our suggestions, you visited the property you love within the first day of it being online. You’re hesitating on putting in an offer since it’s the first time you’ve attempted to buy a home. We understand, it’s a big decision that doesn’t come easily. Suddenly we call you to let you know an offer has been submitted on your dream home by another buyer! A feeling of stress takes over, you decide to not put in an offer because you don’t want to end up in a bidding war. You think: I’ll be quicker next time!
Fast forward a few weeks and the same situation arrises again, except this time you decide to bid against the opposing buyers with a full price offer. The sellers end up accepting the other buyer’s offer… How could this have been prevented?
- Make sure you have a mortgage pre-approval by a reputable bank. We believe that an offer with an attached mortgage pre-approval letter increases your odds of winning a bidding war. We’ve had situations where both offers are similar but one had a pre-approval attached to it. The pre-approved buyers ended up winning a close bidding war simply due to this letter.
- In a seller’s market, it’s very common for a property to sell above the asking price in a bidding war. Yes, even in Outaouais! Creating a bond of confidence with your buyer agent is crucial in a seller’s market. We’ve often had situations where the buyers disagree with our value assessment and end up losing to the opposing buyers. With a rapidly growing average selling price in the region, sometimes a property is simply underpriced or projected to gain a significant amount of value over the next years. Depending on the buyer’s needs, we can suggest the maximum purchase price for a property and ensure that you will still gain value over time. Sometimes this can be a significant amount over the asking price. In these stressful moments, trusting your real estate expert is crucial.
- Creating the offer: There are many clauses and delays in a promise to purchase document. Depending on the buyer’s needs, the seller’s needs and the situation surrounding the bidding war, you have to be cautious with everything you write on the offer. Sometimes a shorter financing delay can create strengthen the offer in the seller’s eyes, respecting the seller’s preferred possession date can often save the owners thousands of dollars and make your offer favorable or even resisting the urge to include that beautiful refrigerator in the kitchen can be the small difference that gets your offer accepted on your dream home.
This was a brief look into maximizing your chances of purchasing your dream home. We are always available for in-person meetings, quick or lengthy phone calls and even text messaging to properly assess your needs or to elaborate on any information you’ve found on our website. Good luck with the house hunting !
Created by : Daniel Lozinski
Real Estate Broker
Co-Founder of the agency