Are you stressing over multiple offers? Don’t want to pay over sticker price? Here’s why you shouldn’t be concerned about it and how to approach it to improve your odds of success.
In Ontario, the seller’s real estate agent must disclose the number of offers to any buyers who have submitted a written offer. However, the specific details, terms, and conditions are confidential. —Although this is likely to change, or at least new options become available through open bidding.
First of all, don’t get caught up on the mindset of paying over the “Sticker Price.” This is simply one person’s opinion of value –the seller or their Realtor, or a strategic number selected to solicit more interest in the home.
When faced with multiple offers from potential buyers, there are typically four key areas that sellers will look at to help them decide which offer to choose. They include the deposit, the closing date, the conditions, and of course, the price. Understanding these factors will make your offer more competitive.
How Much Deposit is Required When Buying Real Estate
The seller will typically ask for 5% of the purchase price. However, the deposit is negotiable, you can sometimes get away with less, but, in a multiple-offer situation, a larger deposit can demonstrate that you’re a serious buyer and financially capable.
Pro Tip: The amount is due within 24 hours of an accepted Agreement of Purchase and Sale (APS). If you cannot provide it within 24 hours, specify due date in Schedule A; otherwise, you’ll be in breach of contract.
What’s the Average Closing Date
Another way to get a leg up is by accommodating the seller’s preferred closing date. If you’re able to find out the preferred closing date, accommodating it could win you the bid. If the seller wants a May 1 closing, and you can accommodate that, while one of the competing offers asks to close in the middle of June, the convenience for the seller can make your offer more attractive.
Can I Include Conditions With my Offer?
When it comes to conditions: The fewer conditions, the better; while mortgage financing and home inspection are common conditions, removing one or both can make your offer much more attractive. The media will tell you this is crazy, but it is often the ONLY way you’ll buy a house in a hot seller’s market.
If you’re adverse, perhaps try shortening them to one or two days, but even this can be a turn-off when competing against firm offers (those with no conditions.) Do your due diligence, try to complete a home inspection in advance, gauge your risk tolerance, and lean on your Realtor for advice.
You may not know what price other offers came in at, so you must do your homework. The best way to do this is to have your real estate agent complete a Comparative Market Analysis (CMA). This is the process of estimating the market value of a property by looking at comparable sold properties based on size, neighbourhood, and comparable features. Remember, when you’re in a multiple-offer scenario, you may not get a chance to revise your offer, so be strategic and thoughtful when deciding what to offer.
Keeping these four things in mind should put you on the winning end. But if it doesn’t, don’t be disappointed. Use this valuable experience and keep searching for that dream home.
If you’re looking for a great realtor in the GTA, call or text KT Realty at 1 (800) 617-0090.