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Ways to Win a Bidding War in a Hot Housing Market

 

If you’re shopping for a house in one of the hottest real estate markets, where the supply of houses, condos, and townhouses is low and demand is high, you may find yourself in a bidding war, with multiple offers pushing prices ever higher.

Add low mortgage rates into the mix, and buying a home can feel like you’re in the middle of “The Hunger Games,” competing in a fierce battle to win the house you love. At least you won’t perish in this process, but it’s certainly easy to get discouraged if you’re edged out multiple times when trying to buy a home.

The best move you can make before writing any offers is to hire an experienced, professional real estate agent.

Having someone on your side who knows your local market thoroughly — and can guide you through these sometimes tough negotiations — means you’ve got heavy backup when you enter a bidding war.

  • Get a preapproval letter from your lender
  • Limit the contingencies
  • Be flexible on the closing
  • Write a ‘love letter’ to the seller
  • Don’t count yourself out after a bidding war

 

1. Get a preapproval letter from your lender

Getting pre-qualified, which merely confirms your income and how much a bank might be willing to lend you based on your credit profile, isn’t the same as having preapproval for a specific purchase offer.

Get a preapproval letter from your lender. Getting prequalified isn’t the same.

You can up your chances of beating out other buyers by including a letter from your bank stating that your lender has underwritten your application and it’s simply pending appraisal.

Submitting all of your financing documentation to your lender before looking at homes and certainly before writing any offers. That way you can pounce quickly when you find the home you want and avoid the stress of submitting preapproval paperwork and writing an offer at the same time.

Your REALTOR will be happy to refer you to a great lender.

 

2. Limit the subjects

Sellers have the upper hand in a multiple-bid situation, and they want offers that are clean and concise. If you know other bids are coming in and you really want a home, avoid putting in too many subjects or making too many demands.

If you know other bids are coming in and you really want a home, avoid putting in too many contingencies or making too many demands.

“Don’t include things like needing to wait for a spouse or partner’s approval, asking the seller to purchase a home warranty or requesting that the seller leaves or repairs certain items”. You also don’t want to ask the seller to pay your closing costs; find an affordable attorney or title company to represent you. Having too many of these items in your contract will make it likely that a seller tells you ‘no’ over another offer.”

3. Be flexible on the closing

Let’s say someone outbids you by a few thousand dollars, but you’re willing to give the seller more time to move out. That flexibility can make you the front-runner in a multiple-bid scenario. Some buyers snag their dream homes even when outbid because they either let the sellers rent back the home for a period or pushed back the closing date.

Extending that courtesy can make your offer more attractive to a seller who might otherwise have to spend more on moving expenses or be crunched for time to find another home.

On the other hand, if a home is already vacant, sometimes you can win the seller over by offering to close in a shorter time. Buyers who offer to close quickly — sometimes within 14 days — can edge out buyers who haven’t been preapproved or have to sell their current home to buy a new one.

Sellers are concerned about liability, theft, holding costs and hazards with a vacant home. Offer to close at the seller’s convenience with occupied homes. Be flexible if the seller needs to find a new home; provide them that time.

4. Write a ‘love letter’ to the seller

With so much fierce competition out there, sometimes appealing to the heart can make your offer stand out. That’s why more and more real estate agents are suggesting that buyers write a heartfelt letter to sellers explaining why they want the house.

I definitely ask my buyers to write a letter and explain how much it would mean to them to get the house. I even have them add a couple of photos of them and their kids or pets. I’ve had selling agents tell me that it was the letter and the complete offer packet that won my clients the listing.

Other real estate agents agree.

“A love letter definitely helps”.Even more important is your online reputation as a buyer. Most good seller’s agents will Google potential buyers to see if they’ve been in a lot of conflicts or if they have a stable job. While this won’t overcome a large difference [in your bidding price], it will definitely help at the margin.

5. Don’t count yourself out after a bidding war

If you lose a bidding war and the seller chooses another bid, have your agent keep in touch if you’re still interested in the house. If a buyer offered way over the asking price, the deal could fall apart on an appraisal or the buyer might be bidding on multiple properties to see which one sticks.

The highest offer doesn’t always mean it’s the best one.

Lappin has seen it time and time again: Contracts that come in way over asking price have a very high cancellation rate. When that happens, [the seller] loses the momentum of being the new home on the market. That could make your offer attractive again.

The homebuying process can feel cutthroat at times, and you may lose one or two bidding wars before you win one; it’s almost a rite of passage. But you’ll be in a better position to win the house you want with a knowledgeable real estate agent to help you write a strong, competitive offer that follows these strategies.

REALTORS Care® Blanket Drive

Winter is coming, and it’s supposed to be a COLD one.
The Blanket Drive is on now!

The need has never been greater
Let’s help keep the record number of homeless and working poor warm and dry this winter.

Our network of REALTORS® are gearing up for another productive year of collecting warm clothes and blankets.

Since it started 23 years ago, the Blanket Drive has helped more than 300,000 people in our communities.

This success is thanks to your donations!

How you can help
Please donate the following items for all ages:
• gently used or new blankets or sleeping bags
• warm clothing, coats
• hats, gloves, scarves
• new socks and underwear
• plastic ponchos, bivy sacks

Here’s a link to drop off locations – http://www.rebgv.org/blanket-drive-drop-locations-0

Ladner, Tsawwassen, and Richmond – I will gladly pick it up from your home/work.
Just message or call me.

Home buyers are about to lose up to 25% of their buying power… Get moving or accessing your equity NOW!

So Let’s Break it down! 

 

What’s Happening? 

  1. OSFI is going to add a NEW STRESS TEST for all borrowers, for all transactions not previously tested (ie. less than 20% down).
  2. Example:
    1. Client A with an income of approximately $95k qualifies for a mortgage of $600,000 today with 20% down at 3.5%
    2. After Rules change this client will now have to qualify for $500,000 purchase price with the SAME $120k downpayment.

When will this Happen? ⏰

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Testimonials

My wife and I met Leon back when he was selling cars. I bought a Chrysler 300 from him. I think it was around 3-4 years ago. He was the best salesperson we dealt with at the time. He followed up with us for over 3 weeks, never rushed or pressured us. Finally we came in and bought the car, no hidden fees or surprises. After we bought he car he was always there if we needed anything. We only dealt with him after that. I sent my coworker to deal with Leon, and he bought a truck there, super happy!!! I’m still in touch with Leon to this day, he’s a great person do deal with. I highly recommend him to all my friends and family. Who know’s, maybe I’ll be calling you soon for a new house. Take care!!
Jim B (Google Review)

If you’re looking for an awesome experience with a realtor he is your man. He took all the stress out of looking for our new home and to top it off we got the house we wanted and at a discounted price too!! Will definitely be using him again. Thanks again Leon!!!
Brandie McCoach (Google Review)

Thinking of selling? Leon is easy to work with, always in touch, extremely organized and well prepared, which helps a lot! I will definitely recommend him to anyone especially in Ladner & Tsawwassen areas. Look no further! I am confident in the excellent service you will receive if you choose to work with Leon!
Ekaterina Lu (Google Review)

 Click HERE to write a review

 

Bank of Canada Raises Interest Rates Again

For the second time since July, the Bank of Canada has increased the overnight rate by 25 basis points, now standing at 1%, the federal bank announced September 6.

The rate hike follows news that Canada’s economy is performing better than expected, which has also resulted in the strengthening of the Canadian dollar, now trading at US$0.82.

Sherry Cooper, Dominion Lending Centres chief economist, said, “The Canadian economy is on a tear, dramatically outperforming the US, and the battering by both Hurricanes Harvey and Irma will only widen the disparity.” She pointed out that economic growth in Canada is becoming “more broadly based and self-sustaining,” according to the Bank’s press release, and added that the second-quarter GDP stats released last week showed that consumer demand is robust, supported by “solid employment and income growth”.

Click here to read the full article

BC to Ban Real Estate Agents from “Double-Ending”

The BC government is set to ban the practice of limited dual agency, meaning home buyers and sellers will no longer have the option to choose one real estate agent to represents both parties in a single transaction, under strict new draft rules recommended by the Office of the Superintendent of Real Estate and announced September 7.

The move, which is intended to protect consumers from any conflicts of interests created by agents representing both parties in a transaction, may not have the desired affect and will also prevent many consumers working with their preferred agent, according to a response by the British Columbia Real Estate Association (BCREA).

Click here to read the full article 

Canadian Mortgage Rates Could Start Rising ‘As Soon As July’

Canada’s economy is red-hot these days. And that’s the principal reason why Canadians could see mortgage rates rising before the end of the year.

In the first quarter of this year, Canada recorded a 3.7-per-cent annualized pace of economic growth, the strongest among G7 countries. Canada added 77,000 full-time jobs in May, and over the past year, the country has seen total jobs increase by 1.8 per cent, faster than population growth.

When an economy strengthens, there is less slack and inflation typically picks up. When inflation picks up, central banks raise interest rates.

So far, inflation has been tepid in Canada. But every sign points to that changing soon. Bank of Canada Governor Stephen Poloz said this week that the low interest rates put into place in 2015 to fight the oil price collapse have “done their work.” That is as clear a sign as you’re going to get from a central banker that they are leaning towards raising rates.

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