5 Ways to Protect Yourself in a Bidding War

By Kathy Schmidt, Broker/Owner, Schmidt Realty Group Inc.

Bidding wars have become really common in the Greater Edmonton Area. In some segments of the market, as many as 50% of homes sell for list price or more, which is a likely indication that there was a bidding war.  Learn how to avoid buyer’s remorse by following these 5 principles.

1. Respect your limits. Whether it’s your 1^st multiple offer or your 5^th, it’s easy to get caught up in the moment and make decisions you wouldn’t make otherwise. Every buyer has a financial limit for their purchase. While you might be willing to exceed that limit by a few thousand dollars, it’s important to keep your initial budget in mind and not get caught up in fear of loss. It’s easy to offer more than you can really afford when you find out you’re competing with a lot of other offers, and later have buyer’s remorse.
2. Avoid win/lose thinking. If you’ve lost a few homes in bidding wars, it’s easy to fall into the trap of “I’m getting the next one no matter what!”.  Every time a buyer competes, they learn more about how to write a winning offer.  Hint: It’s not always about money!* Keep in mind that “winning” is getting a great home that you can realistically afford that hits at least 80% of your wants and needs list. That’s much more important than winning over other buyers.
3. Don’t give away your rights! Buying a condo without reviewing the condo documents, or buying a house without doing an inspection are both very risky ventures. Sure, a seller would always prefer to see a clean offer with fewer conditions, but don’t lose sight of the fact that buying without that kind of information puts you at a high risk of unpleasant surprises after you get the keys. There are rare circumstances where you might choose to not proceed with a these steps… for instance, if you already own a condo in the complex you’re looking to buy in, or if it’s a brand new house with a warranty. But even then, think twice before excluding those items on your offer.
4. Be willing to walk away. This puts in you in a strong position when it comes to buying real estate. Even in a multiple offer when you might think you don’t have much leverage, there are ways to communicate to a seller that your offer won’t be here forever, and that you won’t stay in the competition if you think the seller isn’t being respectful of you or your offer.  There will always be another house, even if it doesn’t feel like it.  A good agent will help you keep that in mind.
5. Hire a REALTOR® who offers a “Love It Or Leave It Guarantee”. Following the first 4 steps should ensure you make a smart purchase you’re happy with for years to come. But if you purchase with a Schmidt agent and change your mind in the first year, we’ll sell it for you with no commissions earned by our brokerage. Click here to learn more about our LOVE IT OR LEAVE IT GUARANTEE!

And of course, make sure that you’re communicating very closely with your agent, and that you and they have a clear understanding of your goals, and your budget.  It takes teamwork to get from house hunting to house-owning. Fortunately, we’re experts at just that and can’t wait to help make your dream of home ownership a reality!