We’ve all heard the horror stories from friends, family, media, neighbours… on trying to buy a home in a hot market. Many go into multiple offers on a property they are interested in purchasing and lose out to another buyer. It can be devastating to some BUT I’m here to give you a few tips to help you get through a multiple offer scenario as smoothly and successfully as possible… and yes, avoiding that heartbreak!
Find Yourself An Awesome Realtor!
YUP! I said it! Find yourself an awesome Realtor that you’ve met with, connect with and feel comfortable with. This isn’t a blog on how to find the right Realtor for you but if you guys would like to read about that I’d be happy to share on another post. Let me know by commenting below or DM’ing us on any of our socials.
When you’re going into multiple offers you need an awesome Realtor by your side for many reasons and here are the top reasons why:
- You are competing with others for a property. Realtors have access to information on properties that you don’t have. They can see what the owner purchased the property for, when they bought it, what it’s MPAC assessment currently is… they can also see what properties in the neighbourhood have sold for AND most importantly what properties in the neighbourhood have sold in multiple offers and get an average of how much over asking price they’ve sold for. This information is crucial when coming up with the purchase price you will be submitting in your offer.
- The seller of the home has a Realtor representing their best interests… whose representing yours? YOUR AWESOME REALTOR IS. If you didn’t have your Realtor representing your best interests then it’s just you… with none of the information listed above or it’s defaulted to the Realtor that represents the seller. How does a Realtor represent the best interests of the seller and you? Answer is, they ethically cannot therefore they won’t.
- THEY’RE FREE. YUP. You read that right! Realtors make their money through the commission of a sale of home. The person who is paying the commission is the Seller of the home. And you guys going through this right now are buyers… so, why the heck wouldn’t you?!
PRO TIP: Grab some cards from your Realtor so when you cruise those Open Houses you can just toss out their card and the Realtor hosting the Open House leaves you alone!
DO NOT FALL IN LOVE!
I know, I know… you’re probably thinking “Damn, Alex… who hurt you so bad that you gotta be hating on love like this?!”… I’M FINE.
No, no, no… we’re not talking about that kind of love! We’re talking about you falling in love with a home because you walk in and it’s perfect! You look around and can see your future kids playing in the backyard, you see your clothes hanging in the best walk-in closet you’ve ever seen in your life, you can see your friends coming over for dinner… so much so you can almost smell the wine! NO. STOP IT YOU LUSH. I know… it’s hard to stop. How can you resist? But you have to… and here’s why. If you fall in love with a home you are more than likely to make decisions in a multiple offer scenario on your emotions rather than your head. This means that when you’re competing with another offer(s) your head knows that you need that home inspection, or that if you spend more you are getting into that territory of being “house poor”… but your heart flutters, like in High School when your crush asks you to skip class with them, and decides that those things don’t matter and you must have it or you will be heartbroken FOREVER.
I promise you guys… there will always be another one! There will be one that fits into the perfect combination of what you want, need and within your budget. Once you’ve found it and secured it then you can fall in love all you want and until then… perhaps I will create a Spotify playlist of breakup songs that will get you through.
PRO TIP: You gotta fall in love with yourself before you can fall in love with a home. JUST KIDDING. But seriously, fall in love with a location before you fall in love with a home because that’s the most important factor in buying a home.
DETERMINE YOUR MAXIMUM PURCHASE PRICE
With the help of your awesome Realtor, mortgage professional and yourself knowing your budget, you will be able to determine your ideal purchase price. In multiple offers, I’m asking that you come up with your maximum price. This is crucial. It is crucial because you need to know when you’re walking away from the table, so to speak. If you don’t have a limit, once again you are left with your emotions leading you in negotiations and making decisions with your heart and, for you folks that are competitive (I see you!), the need to “win”! Before making the offer, know your maximum purchase price and stick to it! When you know how much want to spend on this home and stick to it, you won’t let anyone sway you one way or the other and this mentally prepares you for the fact that you may have to “fold” and let it go and look elsewhere…PS: I don’t play poker but it makes me feel pretty cool using their terms.
The best part of this is that you can avoid something that is happening all over our city right now which is people purchasing for WAY OVER its current market value. This is because everyone is going in blind with their offers not knowing what the others have offered to pay so when the Realtor for the seller comes back and asks if you can “pay just a little bit more”… people are actually throwing down $10,000-$150,000 more. Now… obviously $10,000 isn’t so bad but when you get over the $50,000 mark we are entering a danger zone. Your investment in your home starts to jeopardize. Just because you felt the pressure to buy at that price doesn’t mean the banks or going to agree with you. So, when you’ve established that maximum purchase price with your awesome Realtor prior to entering a multiple offer scenario you will talk to them about the real market value of that neighbourhood versus “multiple offer value” and be able to walk away knowing you are protecting your money and being smart.
PRO TIP: There are some really good mortgage professionals out there that might be able to get you recent bank appraisals of properties. Bank appraisals are one of the better ways of determining the real and current value of a home.