An unexpected bright light in the pandemic years of 2020/2021 has been real estate. More people wanting (or needing) to change their living situation combined with low inventory; has resulted in a busy market, very brisk sales, and even major multiple offer situations. In fact, some properties are getting a dozen or more offers… we recently had one with 41 offers!
So how does one buy anything in this market? Is it even possible to compete? While true that the top price usually gets the house, it is not always the case and there are a few steps a buyer can take to improve their odds.
1. To Subject or Not to Subject, That Is the Question
In most multiple offer situations, the winning offer ends up being a subject free one. A professional realtor will never recommend this as the preferred course of actions, but, at the same time; it often is the only way to have the offer seriously considered. Think of it from the Seller’s point of view. If they have two offers, the one without subjects is a sure thing, a done deal. While the one with subjects means taking the house off the market for several days, or weeks and hoping that subjects are removed, and the deal comes together. If not, then the momentum is lost, and the selling process has to start all over again. However, going in subject free has many risks, so of which can be mitigated with the tips below.
2. Pre-Offer Inspections for That Soothing Feeling
In some cases, there is opportunity to have the property inspected by a Home Inspected in between, or during the showings, and offer window. This is a risk because the Buyer is paying out of pocket for the inspection without any guarantee of winning the house. However, it can also help guide the offer price, potentially save thousands of dollars or costly repairs, and avoid buyer’s remorse with a suspect property.
3. Financing for the Win
Bidding in multiple offers with no subjects, means that the Buyer must plan for the financing and purchase of the property. If cash in hand, then no problem. But if you are depending on financing and staring at a subject free offer – the Buyer needs to have 100% confidence that they will be able to complete on the deal. Working with a reliable mortgage broker and having a plan in place before writing the offer is essential and gives confidence to knowing how much you can really offer.
4. Show Me the (Deposit) Money
Although it is customary to provide the deposit on a winning offer within 24 hours, an offer with a deposit in hand may be able to stand out from the crowd. This means having the funds available and providing a photocopy of the bank draft along with the offer. Also, do not forget the standard deposit is at least 5% of the offer price! Many offers are rejected based on a low deposit, so the higher you can make this, the better.
5. Super-Flexible-Bendy Dates
Everyone knows that price is the biggest consideration in a real estate sale. But did you know that dates are usually the seconds most important thing for Sellers? If you don’t have to line up a move with a sale, or have temporary accommodations available – then leaving completion and possession dates up to the Sellers may give you an advantage over the competition. Sometimes paying for a vacation rental or bunking in with family for a few weeks can be the difference to getting your dream house or not.
6. A Clean Offer is a Good Offer
Although the real estate agent will be writing up the offer, it is up to the Buyer to decide what the offer contains. Adding a bunch of unnecessary items could potentially clutter it up, make it harder to deal with and cause the Sellers to move on to the next offer. So if you can live without the trampoline in the backyard or laundry room shelves, if you can see past the minor repairs and are happy to put in some elbow grease – then leave the extra contract clauses alone and pull ahead of your competition.
7. Working With a Great Real Estate Agent
I may be biased on this one, but trust me, it makes a HUGE difference! In this busy market, with social distancing rules and low inventory. Many properties have limited viewings that often fill completely up. Having a professional working on your behalf will help in quickly identifying these opportunities, get you the showings, and advise you through the offer process.
So how does one buy anything in this market? Is it even possible to compete? While true that the top price usually gets the house, it is not always the case and there are a few steps a buyer can take to improve their odds.
1. To Subject or Not to Subject, That Is the Question
In most multiple offer situations, the winning offer ends up being a subject free one. A professional realtor will never recommend this as the preferred course of actions, but, at the same time; it often is the only way to have the offer seriously considered. Think of it from the Seller’s point of view. If they have two offers, the one without subjects is a sure thing, a done deal. While the one with subjects means taking the house off the market for several days, or weeks and hoping that subjects are removed, and the deal comes together. If not, then the momentum is lost, and the selling process has to start all over again. However, going in subject free has many risks, so of which can be mitigated with the tips below.
2. Pre-Offer Inspections for That Soothing Feeling
In some cases, there is opportunity to have the property inspected by a Home Inspected in between, or during the showings, and offer window. This is a risk because the Buyer is paying out of pocket for the inspection without any guarantee of winning the house. However, it can also help guide the offer price, potentially save thousands of dollars or costly repairs, and avoid buyer’s remorse with a suspect property.
3. Financing for the Win
Bidding in multiple offers with no subjects, means that the Buyer must plan for the financing and purchase of the property. If cash in hand, then no problem. But if you are depending on financing and staring at a subject free offer – the Buyer needs to have 100% confidence that they will be able to complete on the deal. Working with a reliable mortgage broker and having a plan in place before writing the offer is essential and gives confidence to knowing how much you can really offer.
4. Show Me the (Deposit) Money
Although it is customary to provide the deposit on a winning offer within 24 hours, an offer with a deposit in hand may be able to stand out from the crowd. This means having the funds available and providing a photocopy of the bank draft along with the offer. Also, do not forget the standard deposit is at least 5% of the offer price! Many offers are rejected based on a low deposit, so the higher you can make this, the better.
5. Super-Flexible-Bendy Dates
Everyone knows that price is the biggest consideration in a real estate sale. But did you know that dates are usually the seconds most important thing for Sellers? If you don’t have to line up a move with a sale, or have temporary accommodations available – then leaving completion and possession dates up to the Sellers may give you an advantage over the competition. Sometimes paying for a vacation rental or bunking in with family for a few weeks can be the difference to getting your dream house or not.
6. A Clean Offer is a Good Offer
Although the real estate agent will be writing up the offer, it is up to the Buyer to decide what the offer contains. Adding a bunch of unnecessary items could potentially clutter it up, make it harder to deal with and cause the Sellers to move on to the next offer. So if you can live without the trampoline in the backyard or laundry room shelves, if you can see past the minor repairs and are happy to put in some elbow grease – then leave the extra contract clauses alone and pull ahead of your competition.
7. Working With a Great Real Estate Agent
I may be biased on this one, but trust me, it makes a HUGE difference! In this busy market, with social distancing rules and low inventory. Many properties have limited viewings that often fill completely up. Having a professional working on your behalf will help in quickly identifying these opportunities, get you the showings, and advise you through the offer process.
