Bidding War Strategies for Buyers & Sellers
By Kathy Schmidt, Broker/Owner, Schmidt Realty Group Inc.
The current market has surprised buyers and sellers alike. Who would’ve thought we would see so much activity and competition for properties during a pandemic! There are lots of reasons why this might be happening… for some insights on that check out our recent blog here: 5 Reasons Real Estate is Going Strong! – Schmidt Realty Group.
Whatever the reasons, many buyers are finding themselves wondering how to come out the winner in a multiple offer situation, and sellers are second guessing themselves on which offer to take. If you can relate, read on for some helpful tips whichever side of the table you’re on!
Strategies for buyers:
- While you may need to move fast if there’s other interest in your dream house, it doesn’t mean you should ignore important steps. Stop and ask yourself if this is truly the neighbourhood you want to live in, as well as the house. Does this house really work for you, or are you just tired of looking and competing for houses? If the property ticks the boxes, move ahead. But take a breath and hit pause (briefly) first.
- Don’t focus on whether or not you’re “paying over list price”. The seller may have intentionally priced their property on the lower side to encourage multiple offers. Ask your agent to show you what other similar homes nearby have sold for and rely on that information more than what the seller is asking.
- Give the seller what you can where you can. If you can give them their possession date, even if it’s a bit sooner or later than your ideal date, do it. If you can provide a large deposit (refundable if your offer isn’t accepted or if your conditions aren’t able to be met), do it! It’s much more powerful for a seller to see a $20,000 deposit than a $,5000 deposit. And in the end, it doesn’t cost you a penny more!
- Keep your goal in mind. This isn’t a game. It’s not about “beating out the other buyers, it’s about getting you where you want to go!
- Work with a real estate agent you deeply trust and have complete confidence in! And take their advice!
Strategies for sellers:
- Avoid the temptation to make buyers wait for hours (or days!) while you collect other offers. This can backfire badly… I’ve seen sellers try this and end up empty-handed. The buying process is stressful and making buyers wait increase their anxiousness about the whole process. Some buyers will pull out of the process just to make the tension go away!
- When you get an offer, make sure you understand your options regarding advising other agents and their buyers about what’s happening. In most cases you’ll want your agent to reach out to other agents who’ve shown your home, but in rare cases that may not be your best strategy. Your agent can advise you best on your individual situation. Take their advice!
- Don’t take everything at face value. Just because you have a few offers in front of you doesn’t mean you shouldn’t do your homework. Ask your agent to inquire about the buyers, their financial qualifications and their ability to follow through on the offer. If you can find out why they love your home, that will tell you a lot about which buyer might be your best buyer.
- Think “big picture” When you put your home on the market you set a price. Focus on achieving that price with a solid offer that proceeds smoothly to possession. In other words, don’t get greedy. It’s not about earning bragging rights, it’s about getting a huge financial transaction smoothly to completion.
- Choose your agent carefully, making sure that you have a good rapport and that your expectations for communication are clearly set out and agreed to. The agent you choose has a significant impact on your sale, and when it comes to negotiating multiple offers you need the right agent in your corner!
Every offer scenario is different, and your best strategy may not be the same as that of another buyer or seller. In real estate we have a saying … “Every job is a custom job.” Whether you’re a buyer or a seller, there are 3 things to keep in mind that will help you in any offer scenario, whether you’re competing or not:
- Take a breath and slow the process down, even for a few minutes, to get your emotions in check. This is a big financial transaction and while it’s exciting, being able to set your emotions aside is incredibly important.
- Keep the big picture in mind. Why are you moving? How will you feel when you get there? What will it take to make that happen?
- Choose your agent carefully. Then listen to their advice.
At SCHMIDT, we’ve safely guided hundreds of buyers and sellers safely through the offer process, including bidding wars. We can get you safely where you want to go too! We’ve got a lot of experience and a few tricks up our sleeve to give you an edge in any offer scenario. Reach out anytime to chat about your real estate plans.