Are you looking to buy a condo in the GTA? Market conditions being what they are, you may find yourself in a situation where you’re not the only person who wants a particular unit.
While competing offers aren’t uncommon, they can be frustrating. Ultimately, the outcome is up to the seller. But there are a few actions you can take to tip the scales in your favour. Here are six things you should keep in mind for multiple offer scenarios.
1) Get early pre-approval
In a competitive situation, be prepared to move quickly. That means getting pre-approved so you can make a strong offer straight out of the gate. Because in a multiple offer scenario, the buyer who needs more time could be crossed off the seller’s list.
Also worth noting: some buyers try to appeal to a seller by signing a contract that doesn’t contain a financial condition. It’s a risky move, because it means you won’t have an “out” if you need one. But when you’ve been pre-approved for well over the seller’s asking price, it might be something to consider.
2) Review the status certificate
In a multiple offer scenario, anything that moves you one step closer to an early closing is a good thing. That includes asking the seller about the status certificate early on, and making sure your lawyer is ready to review it.
I know how tempting it can be to simply say “yes” in a fast-paced market. But as a buyer, you need to understand the financial health of the building you’re looking at. The last thing you want is to purchase an in-demand unit only to learn about a special assessment that will seriously impact your finances later on. Trust me, it happens.
Another reason to get that status certificate asap? Your lender may require it.
3) Limit your conditions
When sellers have their pick of buyers, asking for too much might mean you’ll never get to closing. For example, offers that are contingent on the buyer’s ability to sell their current home are rarely appropriate when the market is competitive.
Also, forget about trying to have inspection conditions included with a condo offer. When there are multiple offers to involved, many sellers will see inspections as an annoyance. And the truth is, they’re often unnecessary (some very old buildings might be exceptions).
Bottom line: avoid unnecessary requests and stipulations.
4) Be the buyer the seller wants
Are you prepared to make concessions? If you really, really want a condo that’s in-demand, you might have to. Motivated buyers should try to make closing the deal as attractive as possible. I suggest finding out what the seller wants. Do they hope to close by a particular date? Are they hoping to get a minimum 5 per cent deposit?
Sellers won’t always come out and say exactly what they’re hoping to get. For some, it’s easier to let the offers roll in and accept the best one. By asking the question—and doing your best to accommodate the seller’s wishes—you just might give yourself a leg up on the competition.
5) Forget lowballing
Don’t try to lowball a seller who has multiple offers. And don’t walk away the minute a seller asks for more than you expected to pay—because they probably aren’t bluffing.
If you do make an offer that the seller isn’t happy with, you may get a chance to improve it. But when there are others competing for the same unit, you don’t want to risk losing out altogether.
In competitive situations, I’ve seen smart buyers offer significantly more than they would have paid for the same unit a few weeks previous. Why? Because they understand the market. They know what constitutes a good first and final offer, and they’ve worked that information into their negotiation tactics.
6) Be courteous
This may seem like an obvious point, but it’s easy to forget when you’re stressed out about having an offer accepted. Be friendly. At the end of the day, we’re all human beings. We want our transactions to be pleasant. Courtesy and a willingness to work with a seller’s requests can go a long way in a multiple offer scenario.
Want to be prepared for a multiple offer scenario? I can help! Send me a message and we can book a free, no-pressure meeting to talk about it.
