5 Tips for Winning a Bidding War

Despite the COVID-19 pandemic the Ontario real estate market remained remarkably strong. Bidding wars are common occurrences in Toronto, suburbs and rural home markets now.

Sellers are holding back offers by setting a date/time to receive all offers at once and to pick the one that suits them most. Multiple offer situations are stressful for buyers, because they are bidding on a property blindly not knowing the nature of competing offers. Having worked in a lot of multiple offer situations on both seller and buyer sides, I would like to share these five tips on how to win a bidding war:

1. Getting a mortgage pre-approval and knowing exactly how much you can afford is the first step. That includes understanding how the fluctuation in maintenance fees and property taxes affects your pre-approval as well.
2. Create a solid search criteria based on your location boundaries and other preferences such as proximity to transit, required amenities, size, etc. Your realtor should be able to create a list of “must haves”
3. Educate yourself on the market complexity and develop a strategy based on your pre-approval and the search criteria (i.e., would you be willing to forego some of the conditions to make your offer stronger?)
4. While advice from family and friends is helpful, it is important to make decisions without being influenced by others. Listening to people’s opinions might put you under duress, and that is the last thing you need when buying a property.
5. Last but not least is understanding that the market value of a property is not something dictated by what happened in the past. While the past sales records can serve as a guide, they do not indicate the exact value when the market is increasing fast. The true market value is what both selling and buying parties are willing to accept NOW, not in the past.

Buying a property in this extremely complicated market is not for a faint-hearted. If you made a decision to purchase, then follow through without looking back. Learning about your options and moving decisively without fear or regret will increase your chances of getting a prefect home.