One of the most stressful situations in home buying occurs when other buyers are competing for the home you want. To make an offer on the perfect house only to find out you have entered a bidding war is certainly frustrating.

It doesn’t happen often, but if there is a shortage of homes for sale, or you are looking in a particularly sought-after area, it’s a possibility. It’s common to feel helpless as you wait for communications to come back through the agents involved, hoping for some good news.

To that end, I’ve put together some tips for how to make a multiple offer situation as comfortable and successful as possible for my buyers.

• Pick a real estate agent who is well organized and an exceptional communicator. A lapse in communication could be interpreted as disinterest. Don’t get overlooked because your agent didn’t communicate with the seller’s agent in a timely manner.
• Have your pre-approval letter or proof of funds in hand. You may have a great offer to submit, but if you can’t back it up with proof you are qualified to purchase the home the seller may just move on. Make a cash offer if you are able. If not, make as large a down payment as possible, and use a lender that communicates effectively with all parties.
• Offer more than the asking price. Your agent should do a comparative market analysis to give you a good idea on the home value as soon as you decide to make an offer. If it’s not too out of line with the CMA or your budget, offer more than the asking price.
• Keep your offer clean and simple. Don’t ask for contingencies that aren’t necessary to closing the transaction.
• Shorten the subject removal period. Asking for a 5 to 7 day inspection period instead of the traditional 14 lets the seller know that you aren’t going to waste anyone’s time. Find a home inspector who has availability to schedule your inspection as soon as your offer is accepted.
• Have your deposit ready. Offer a deposit that sends the message that you are serious about your offer and have the funds ready to turn in as soon as your offer is accepted.
• Offer flexibility with your closing date. Convey through your agent that you are willing adjust the closing date to suit the seller’s needs.
• Include a personal letter with a family photo. Let the seller know who you are, what you like about the home, and that you intend to take good care of their former residence. Let them know what it is about the home that has already made it special to you.
• Offer an additional deposit after the subject removal period. This is another way to let the seller know you are serious about the house and not just trying to get it off the market while you make up your mind or look further.
• Consider an escalation clause. Let the seller know that if your offer isn’t the highest you will go up by including a clause stating that you will increase your offer, up to a set price, if the seller shows you a higher offer from another buyer.
• Be diplomatic with negotiations after your contract is signed. Remember that the seller has other interested parties to fall back on. If you turn ugly after the contract is signed, making additional demands or not following through with your promises, the seller may hand you back your deposit and work with someone else.

Buying your first home is an exciting step and first-time buyers are eager to skip right to house hunting before they are ready. To avoid disappointment, follow these steps to ensure you are ready and able to make a successful offer on your dream home when you find it. 

1. SAVE

You’re ready to buy a home. The first thing you need to do is start saving for a downpayment (appx 20% of the purchase price). This may seem like a daunting task but it’s not impossible. Look for ways to earn extra money (freelance, pick up overtime shifts), cut expenses, or invest your savings so that your money is working for you!

2. Build Your Credit Score

The higher your credit score the lower your interest rate will be so a healthy credit score is essential. Be sure you pay all of your bills on time, start paying off debt, keep credit card balances low and only apply for/close credit cards as absolutely necessary.

3. Calculate What You Can Afford

As a general rule, you want to spend less than 30% of your monthly income on housing. Calculate your currently monthly payments and what they will be once you purchase a home and compare to your monthly income. 

Things to consider:

• Income: What is your monthly income?

• Debt: Add up your monthly payments (car, insurance, mortgage etc.)

• Closing Costs: how much you will need at closing (adjustments, insurance, taxes, legal fees etc.)

4. Get Mortgage Pre-Approval

Mortgage brokers have access to products from multiples sources so they can shop around for the best deal on your behalf. They will review your income, expenses, and credit score to determine what size of loan you qualify for. Once you are pre-approved, you can shop with confidence for homes at or below your approved price-point. 

What you will need to get pre-approved:

• Proof of income

• Proof of assets

• Good credit

• Employment verification

• Documentation (ID)

5. Decide What You Want In A Home

Visit different neighbourhoods to narrow your search. Create a checklist and be realistic about what you can afford and what you are willing to compromise on. 

6. Choose A Realtor

An experienced REALTOR can be a valuable source of expert advice and local market information. They will guide you through the process, and act as your advocate when negotiating and closing a deal. 

7. START LOOKING FOR HOMES

Now the fun begins: you are ready to start looking at homes! Visit open houses and tour homes with your REALTOR. 

Happy House Hunting!