Multiple offer situations are still pretty much the norm in Toronto’s hot housing market. Even during the Covid pandemic, house-hunters are still willing to go the distance to get the house of their dreams. Because what could be better than spending your work-from-home days in front of that fireplace you’ve always dreamed of, looking out onto your tree-lined street.
So, after months of searching, you’ve finally found your dream home. It has all of the new updates you were looking for with the character of the Victorian you had your heart set on. But before you start discussing the closing date and how magical the holidays will be, you come to realize your offer isn’t the only one the seller is considering.
Prospective buyers are facing this situation on a regular basis, but with that said, you don’t have to lose out on the perfect home just because others might be interested in it as well.
Here’s how to handle multiple offers on a house and come out on top.
Get Your Mortgage Approval FIRST
In a multiple offer situation, you want to have an advantage over the other hopeful buyers from step one. That means being mortgage-approved and not just pre-qualified. Many first-time homebuyers put themselves at a disadvantage because they either don’t understand the importance of a mortgage approval or assume it’s interchangeable with a pre-qualification.
Getting pre-qualified means going over your financial picture with a lender and having them pull your credit to ensure it’s in line with today’s mortgage guidelines.
A mortgage approval involves a more extensive underwriting process. Those interested in obtaining a mortgage approval must provide financial information such as pay stubs, bank statements, etc.
There is no question that a seller will favour a buyer who is approved over someone who is not, or someone who is not quite sure.
Increase Your Offer
Sometimes it really is that simple – but ONLY if you can afford it. While other buyers may purposely come in with low offers, your best bet is to make a strong offer from the beginning. This shows the seller that you’re not only serious about their property, but that you also respect their time and are not interested in playing games going back and forth negotiating.
Have as Few Conditions as Possible in a Multiple Offer Situation
Perhaps you’re up against other approved buyers who are ready to make a strong offer, just like you. In this case, you may consider waiving as many conditions as possible. This tactic essentially releases the seller from the responsibility of making any repairs prior to closing or having to wait in limbo for the conditions to expire.
This isn’t to say there isn’t any risk associated with a no-condition offer. One of the things you can do is to work with your agent ahead of time to secure a home inspection or a status certificate (in the case of a condo), so you can evaluate the property on your own and determine if a no-condition offer is feasible.
Work with the Seller
No two multiple offers scenarios are the same. That’s why we recommend having your broker connect with the listing broker to find out what the seller’s plans are. You may find they are requesting a leaseback or want a quick close, for example. Open communication plays a critical role in a situation where you’re trying to make your offer stand apart from the rest.
Create a Personal Connection
You may know someone who wrote a personal letter to the seller when buying their home. But does making this effort even make much of a difference? The answer is yes – creating a personal connection with the seller can ultimately make your offer rise to the top.
In terms of what the letter should say, we suggest going into what specifically made you fall in love with the home or neighbourhood. Mentioning some of the renovations or personal touches can go a long way. Thinking of starting a family in the near future? Why not mention that in your letter as well? Make it known to the seller how much you’ll love and care for their home.
Have a Backup Plan
Let’s say you did everything you could to present the best and most attractive offer to the seller. For whatever reason, they decided to go with a different buyer. Don’t lose hope! Should the first buyer drop the back, you’re next in line to get the house on your terms.
There are also plenty of gorgeous houses and condos on the market, and your dream home will find you when the time is right. It could very well be the next one you look at.
As you can see, there is a lot that can happen when more than one buyer is interested in a home. It’s yet another reason to work with an experienced, trusted broker who represents your best interests and goes above and beyond for their clients.
If you’re interested in learning how our strategies have helped buyers get into their dream home faster, simply complete our form below – we’ll be in touch right away.