Winning a Vancouver bidding war, lessons from the trenches.
In this crazy market it’s not uncommon for there to be 10 competing offers for the house you would like to call home and sadly that’s not likely to change in the near term unless the federal, provincial and municipal governments take coordinated action to slow down foreign investment in the Vancouver real estate market. So you ask; how does one increase their odds of winning in a multiple offer scenario?
I have 7 nuggets of knowledge I impart to my clients when we are contemplating engaging in a bidding war.
- Get a commitment letter from your lender to determine exactly how much house you can affords before you make an offer.
- Have an inspector lined up to perform a pre-inspection of the property prior to the posted offer date.
- Once you have the commitment letter from your lender and you are satisfied with the outcome of the inspection make your offer subject free. Yes, that means zero subjects and I would go so far as to spell it out in the contract, this is a no subject offer.
- Leave the completion date and possessions dates open. It’s not always the highest offer that beats out the competition. We have won several bidding wars where we did not have the highest offer but gave the seller the option to structure the closing and possession dates to accommodate their schedule.
- Increase the deposit, as high as possible. A large deposit cheque presented with the offer has a powerful psychological impact when the offers are presented and your deposit is double or triple the standard amount. We have lost several bidding wars because the competing offer included a 10 or 20% deposit and my clients could only manage a 5% deposit.
- Draft a pleasant cover letter indicating how much you like the sellers house and the neighbourhood and how you can picture yourself building a life there with your family. Some sellers prefer to sell their homes to real people like you rather than developers or speculators and will often take a lower offer from a family opposed to a higher offer from a developer who will demolish the home they raised their family in.
- Adopt a sanguine yet detached perspective since the house hunting process can take many months and multiple bidding wars until you emerge victorious, but securing your new abode is worth the effort.
I hope you find this information useful and if you have more questions please don’t hesitate to call or e-mail.