It’s no secret that the housing market in Ontario is hot right now. In some parts of the province, there are more buyers then sellers. This has led to bidding wars on houses, where potential buyers compete with each other to see who can offer the most money. If you’re looking to buy a house and don’t want to miss out, you need to know how to win a bidding war. In this blog post, we will teach you what you need to do in order to come out on top.
What is a bidding war?
A bidding war is when two or more potential buyers compete against each other to purchase a property. Bidding wars are common in markets where there is more demand for properties than there are properties available. In these cases, sellers will usually choose the highest bidder in order to get the most money for their home.
If you’re looking to buy a property, it’s important that you be prepared for a bidding war. This means having your financing in order and being ready to move quickly if an opportunity arises. You’ll also need to be comfortable with the idea of potentially paying more than you originally budgeted for the property.
That brings us to our next point.
How to win a bidding war
These are different ways you can win a bidding war on a house in Ontario, Canada.
1. Send in an offer as soon as possible
If you’re interested in a property, it’s important that you put in an offer as soon as possible. The longer you wait, the more likely it is that another buyer will make an offer first. When this happens, you’ll be at a disadvantage because the seller will already be considering other offers.
If you’re serious about buying the property, your best bet is to submit an offer as soon as you can. This shows the seller that you’re committed to purchasing the home and gives you a better chance of having your offer accepted.
2. Try buying when there’s low competition
The best time to buy a property is when there’s low competition from other buyers. This usually happens during the winter months, when fewer people are looking to purchase a home.
While there may be fewer properties available during this time, you’ll have a better chance of getting your offer accepted since there won’t be as much competition from other buyers.
3. Hire the right realtor or brokerage
When you’re looking to purchase a property, it’s important that you work with the right realtor or brokerage. This is because they’ll be able to provide you with information that can give you an advantage in a bidding war.
For example, your realtor should be able to tell you how much other buyers are willing to pay for a similar property. They should also be able to negotiate on your behalf and help you come up with an offer that’s more likely to be accepted.
If you’re serious about winning a bidding war, it’s worth hiring a real estate lawyer as well. They can help review the contracts and make sure that everything is in order before you submit your offer.
4. Understand market value
In order to win a bidding war, you need to have a good understanding of market value. This is the price that similar properties are selling for in the area.
Your realtor should be able to provide you with this information, but you can also do your own research online. Websites like Zillow and Redfin can give you an idea of what homes in your area are selling for.
Once you have a good understanding of market value, you’ll be able to make an offer that’s more likely to be accepted by the seller.
5. Get pre-approved for a mortgage
If you’re serious about buying a property, it’s important that you get pre-approved for a mortgage. This is because it shows the seller that you’re able to finance the purchase of the home.
Getting pre-approved for a mortgage is a fairly simple process. You’ll just need to provide your lender with some information about your finances, including your income and debts. Once you’re approved, you’ll be given a letter that specifies the amount you’re approved for.
This letter will come in handy when you’re making an offer on a property. The seller will know that you’re able to finance the purchase and are more likely to accept your offer.
6. Be cautious of waiving conditions or inspections
It’s very common to waive conditions or inspections as a way to convince sellers to choose your offer. After all, it does speed up the process and make it easier.
However, you should be cautious of doing this. In some cases, it may not be worth waiving these conditions as it could end up costing you more money in the long run.
For example, if you waive the home inspection and later find out that there are major repairs needed, you’ll be responsible for paying for them. This could end up costing you thousands of dollars that you hadn’t planned on spending.
Therefore, it’s important to weigh the pros and cons of waiving these conditions before making a decision.
If you do decide to waive them, make sure that you have a realistic understanding of what needs to be fixed and how much it will cost. This way, you can budget for any repairs that need to be made.
7. Create a personal connection with the seller
Homes have history and emotions attached to them. It’s not just a transaction to the seller.
One way to win a bidding war is to create a personal connection with the seller. You can do this by writing a letter to them explaining why you want to purchase their home.
In your letter, you can talk about your own history and how you see yourself living in their home. You can also mention any emotional attachments that you have to the property.
For example, if it’s been in their family for generations or if they’ve raised their children there. Creating a personal connection with the seller can be difficult, but it’s worth doing if you’re serious about winning a bidding war.
Final thoughts on winning bidding wars in Ontario
With the current state of the housing market in Ontario, it’s not uncommon for buyers to go through bidding wars. If you’re serious about buying a property, there are things that you can do to increase your chances of winning.
Some of these include hiring the right real estate lawyer, realtor, making preemptive offers, and getting pre-approved. By following these tips, you’ll be more likely to win a bidding war and purchase the home of your dreams.
Contact us today to schedule a free real estate law consultation.