Before making an offer you should prepare yourself for the chance that you may be involved in a bidding war, especially in a sellers market. The first thing you want to know is your limit (this includes getting pre-approved), once you know your budget determine how much you can go over if you end up in a bidding war, and stick with it.
Know exactly what you’re looking for in your new house, have your real estate agent screen all the new listings and send you ones that fit your criteria right away so you can hopefully view it before the listing goes public, this way you’ll be ahead of the game if you want to submit an offer.
Real Estate is a great investment but you need to do your research and be smart about it, you don’t want to get caught up in a bidding war and gamble away the return on your investment. It’s your real estate agents job to search for comparable properties within the neighbourhood of the home you want to make the offer on and to advise you on the market value, but you control your money.
Money isn’t everything, writing a short letter to the seller(s) explaining a little bit about yourself and why you want their home so much can set you apart from other buyers, selling a home can be an emotional time, especially if the seller raised their family in the home, some sellers would prefer to see another family enjoy their home over a few thousand dollars.
Including a significant deposit in your offer will show sellers that you’re serious about purchasing, and the deposit will go towards your downpayment if you get the property.
In a multiple offer situation don’t add unusual requests, terms or conditions, the closer you can agree with what the seller(s) want, like the closing date, the better.
A “clean” or firm offer, which is an offer without conditions such as, financing, insurance and home inspection will be more appealing to a seller, however you want to be aware that these conditions are included for your benefit and waiving them may not be in your best interest. A home inspection for example could potentially reveal minor to major issues with the property. If you choose to waive your home inspection condition and max out your budget in a bidding war then after moving in significant problems arise this could end up costing you big money to repair and you may end up regretting your decision.
Bidding wars can get ugly and you don’t want to get caught up in it so be prepared, know your limit and stick to making your best offer you can afford that you’re comfortable with.