5. How do we approach a Multiple offer situation?
With the market still very good (as opposed to HOT), many of my buyer clients have encountered multiple offer situations. There are 3 options that the seller has with handling multiple offers. For example, if there are 4 offers on the table, they can either accept ONE offer, counter offer ONE offer, or reject ALL offers. For the buyer to handle this situation, there isn’t much you can do in terms of negotiations as the ball is entirely in the sellers court. Buyers can try and reduce the number of conditions they have in their offer by getting a home inspection done prior to the offer presentation (if time permits), so that you can know before hand and make a better decision based on that. If the house/condo is definitely the property of your dreams, you need to determine how badly you want it. In terms of the pricing, there much isn’t you can do but give them your best shot (top dollar you’re willing to go). You want to see how much you’re willing to go up without feeling like you lost out because if you find out someone else bought it at a price that you’re willing to pay, that’s the top dollar you should put in for your offer.
Other conditions that you might normally put into the offer would be conditional on Financing and perhaps status certificate or survey. You can try and get a copy of the status certificate/survey before hand if you have enough time. Talking to your mortgage broker/agent to get a confirmation that you would be qualified for that particular unit. This would be a little more different than a mortgage preapproval because certain properties/buildings/condos require different qualifications from the mortgage lenders. For example, a hotel residence might require a bigger down payment or some lenders don’t even approve a mortgage for that type of unit (Which is also why you would want to put in a financing condition in the first place). So by you getting it confirmed that you can get the financing, you are able to take that condition out of the offer.
In a multiple offer situation, which a lot of the sellers want to get, you might feel like you’re paying “too much” for a particular property (if you consider comparables that sold recently). If you get to that situation, you need to reassess if that place is what you really want. If the answer to that is Yes, then you definitely need to consider if paying a few thousand dollars more is worth the location, convenience, space, etc for the next 3-5 years or however long you plan on staying there for.
Considering that there is a low supply of real estate, the demand from the number of buyers make the situation hard for some to compete in this type of market with the number of multiple offers that happen daily. Make sure you have an agent who is still looking after your best interests in mind and not go ahead with removing the conditions before you understand what you’re taking out.
For further assistance or questions, feel free to contact me!