In a hot real estate market it is not uncommon to see multiple offers on properties. As we have seen in Victoria over the last year, the lack of inventory has meant that multiple offer scenarios have become the norm for the time being. As a Buyer it can be difficult to navigate and can also be discouraging.
When looking to purchase a home in this multiple offer climate, there a number of ways to increase your chances of success when writing an offer. Here are a few to consider:
- Talk to your lender about getting a pre-approval in place, and take it one step further and ask your lender what is required to get yourself in a position where you do not need a financing condition in your offer. The fewer conditions an offer contains, the less risk there is that the offer may collapse and therefore the more attractive the offer is to the Seller. This may mean having your Realtor provide the property details (taxes, strata fees, age of the home etc.) to your lender prior to making an offer so they can double check the numbers against the specific home and ensure there will be no issues obtaining a mortgage.
- Have a home inspection done prior to writing your offer. If you find a home you’d like to write an offer on, but aren’t comfortable with forgoing an inspection in order to eliminate the need for a home inspection condition, it is perfectly acceptable to request an inspection prior to submitting an offer. In a busy market with tight timelines, this can be a bit tricky but it is doable. It may be a good idea to call a few inspectors to get an idea of their turn-around time so you know who to call when the right home pops up. Not only will this give you the peace of mind of having an inspection report prior to writing your offer, but it will show the Seller that you are very serious about the home.
- Consider the Sellers’ wishes where possible. Often Seller’s have purchased a new home and already have specific Completion and Possession dates and need to co-ordinate their sale to line up with those dates. Seller’s may also have certain items they wish to exclude from their sale such as window coverings, specific appliances, light fixtures etc. If you can determine the Seller’s needs ahead of time and work them into your offer this may help your offer to stand out against the others.
- Write your best offer the first time, as you may not get a second opportunity to increase your offer when up against others. The question to ask yourself is this: If you found out the winning offer was for $5,000 more than your offer, would you be happy you had walked away or would you have been willing to increase your offer just that little bit extra? Your highest and best offer is one that you need to feel comfortable with which makes it difficult for your Realtor to determine for you, but your Realtor can provide you with information to help with your decision such as the number of other offers the Seller might be expecting, what other homes have sold for in the area in relation to the list price etc.
Whether you are looking to buy your first home or are a seasoned real estate investor, understanding how to approach a multiple offer situation can help to minimize surprises, manage expectations and lead you to a successful purchase!