How to Win Multiple Offers?

1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading...
How to Win Multiple Offers
Table of Contents

In high demand and fast sellers markets like the Toronto real estate market multiple offers or bidding wars happen very often. The current inventory level in Toronto’s housing market is 0.53 MoI, which puts Toronto in a tight sellers market category.

Winning a multiple offer or bidding war on a house in a sellers market needs you to have a strategy in place. Especially if you are a first time home buyer who has not experienced this before, you might soon get frustrated.

If you are a Toronto real estate agent who is helping home buyers or first time home buyers, you also can use the below strategies to help your client to win their dream home. These are the strategies that best real estate agents in Toronto use to help their buyers win the homes in the seller’s markets.

A. What type of offers to draft to win multiple offers

When it comes to multiple offers or winning a bidding war on a house or a condo, the most important strategy is to choose the right kind of offer for you or your client. Let’s review types of offers and see what fits you better:

Read more: Listing Strategy in Toronto Real Estate Market

Conditional and Firm offers:

Firm offers ( no conditions in the offer ) are offers that buyers take all the risk and buys the property “as is” and will have to close the transaction on the closing date no matter what. If a buyer can not close a transaction, he may lose the deposit or other financial penalties if the seller can not successfully sell the property with the same price to someone else. To be aware of all the risks, you can talk to your solicitor about it. So when you sign a firm offer you need to make sure you can close the transaction.

Conditional offers are offers that buyers put a condition like financing condition or inspection condition etc in the offer.

What sellers look for in an offer in a multiple offer situation?

When buyers are competing on a property, Price is not the only factor. I have had cases in multiple offers where buyers offered higher prices but sellers went with an offer that was clean but with a lower price.

The reason is that, if sellers accept a conditional offer but the buyer uses that condition to get out and the seller has to market the house again, they will lose the momentum. They may not be able to gather many buyers to compete in their bidding war, on another offer day. Unless they get 1 or 2 offers or 0 offers, they are forced to accept a conditional offer ( it happens in buyers markets or balanced markets ).

Toronto’s current real estate market is a seller’s market, so many properties get multiple offers. In this case a firm with the higher price and good closing date has the highest chance of winning the property.

Are buyers taking the risk of signing firm offers?

In multiple offers and the current market conditions in Toronto, buyers have to do their Due Diligence before submitting the offers.

For example, if they need a home to be inspected, they hire a home inspector to walk through the house with you during the showing and tell you his opinion if he sees any issues, or you at your own discretion and risk, like many buyers out there, take out the inspection condition. So basically in order to go firm in offers, the buyers either : 1. Do their due diligence before submitting the offers 2. Take the risk and remove any conditions from the offer based on their own discretion.

The same applies to mortgage approvals, if you are not sure about your mortgage or financing, you need to send a copy of the listing to your mortgage broker / bank and get a green light from them. For example, tell them that I wanna put a firm offer of $1.35Millions on 123 Main St, Any city, ON, am I good to go or not. So I suggest doing all the due diligence steps before putting in any offers.

Same applies to reviewing the status certificate, in condos the status certificate is the document that reflects most things about the condo, so it has to be reviewed by your lawyer. Before submitting an offer on a condo, if the status cert is available, you’d have to send it for a review so you can remove that condition from the offer too.

Once you sign on any offer, if both parties accept it, it’s binding and must go through as it is agreed!

Typical Conditions for Freehold homes:

Common conditions in freehold houses are mortgage and inspection by an inspector. Other conditions can be added in a buyers market or at the buyer’s discretion. Based on your area conditions may be different. For example if you’re in a rural area, you want to inspect the water quality and septic etc.

Conditions for Condo apartments:

Common conditions for condo apartments are mortgage and status certificate review by a lawyer. Other conditions can be added in a buyers market or at the buyer’s discretion.

What Price to put on the offer in multiple offers?

You don’t want the price to be too high to increase the risk of under-appraisal. On the other hand you don’t want the price to be too low to lose the house. The best strategy is to check the comps with your real estate agent. Don’t rely on sites like houssigma for valuation, they are not accurate and they are computer generated averages. Ask your agent to compare apples with apples. A knowledgeable Toronto real estate agent can help you to determine the right price and value. For more information you can check the youtube video on how to win multiple offers.

Deposit has to be ready:

In multiple offers you need to have your deposit ready in hand with the offer. If you are low balling or just trying, literally you don’t need to have the deposit because the chances that you get the house in a multiple offer with a lowball offer is super low!

But if you are offering to win the home, I recommend you have your deposit bank draft ready with the offer. That will help you a lot when you’re in close competition with another buyer.

Personal Letter / Video + A Letter from your mortgage broker:

A personalized letter from your family to the seller’s family might help you when the competition is close. I have had my buyers won a multiple offer where the seller had received an offer 10K higher, but chose my buyer because of personal connection and the stage in life.

Also adding a letter or video from your mortgage broker can help to give confidence to the seller that your financials are good.

Conclusion:

If you’re a buyer or a real estate agent in Toronto or in any sellers market, you need to be doing all the necessary steps before putting in an offer. The above steps help you to set your strategy to win in any multiple offer or bidding war situation. I wish you the best of luck!

It's simple to get a great REALTOR® with this QUICK and easy online service

Find a Top Toronto Real Estate Agent within a few clicks! Whether you are selling your home or buying your first home! By answering a few questions you get matched with a Top REALTOR®!

Mark was amazing to work with. He anticipated my questions and needs from start to finish, and I trusted him completely. It was obvious that he had my best interests at heart. Mark’s personality made the search for a new home fun, but I never doubted his seriousness in finding me the best home he could. He went to bat for me without hesitation and found me exactly what I needed, taking care of every detail. It made the process exciting, enjoyable and stress free. I would highly recommend him to any future home buyers or sellers!

Breanne M

-

Ari is the most pleasurable person I have ever dealt with before. He never once pushed me towards anything I didn’t want, which is rare in this space and really cared about what I really wanted. You can really feel it from his actions. He catered his service to my needs. He was very patient, hard working, diligent, on top of things and real with me about the situation of the market. The quality of service was very high, not just for this industry but in general. He guided me personally through the contract process in person and made it absolutely painless. Such a reliable guy anybody would refer to their friends. I would definitely recommend Ari!

Bo L

-

communication throughout the entire process making it smooth, transparent and timely. I recently got transferred to Toronto for work. I was scared I was not going to find a place in Downtown that met both my expectations and my budget, as the Downtown market is highly competitive. I am thankful that Ari took the hassle out of the apartment hunt. He delivered great listings that met and exceeded my expectations, he was always on top on arranging viewings and willing to make accommodations to fit my busy schedule. This allowed me to find a desirable place on my first week here in Canada. I appreciated his time and dedication, it was such a relief knowing that he was invested on my best interest. I can’t recommend him enough.

Juanita

-

Ari was quick to understand my needs and steer me in the right direction. His professionalism and warmth made the process of finding a suitable home a lot less stressful than it could have been. He quickly arranged times to visit places I was interested in, which was one of the reasons I could seize a good deal and get a nice home in a good location. He is patient, friendly and knowledgeable and he definitely provides an above average service. I have nothing but good things to say about him and recommend him to everyone looking for a realtor.

Dario Machado

-

Dear Ari, I wanted to thank you for finding me my dreamed condo ! Ari is a very reliable and dynamic person, thanks to his professionalism he found me the perfect condo in less than 24 hours !! As a newcomer in Toronto, I was not familiar with renting process but Ari made it easy, fast and really stress free for me, he was very helpful. I am really happy for the high quality of the service he provides and I will recommend him to everybody without a doubt.

Elodie

-

Oh Ari, In this crazy game of downtown real estate it is quite difficult to find an agent that is timely, true to his word, and a joy to be around. Not only did you make the search process very easy but how quick you put everything together when I was ready to make an offer was phenomenal. The online process really saved me a lot of time and explained everything very well. Most of all though your attitude and humor really made things enjoyable and you were very accommodating to whomever I brought with me on my viewings. I would definitely refer Ari to anyone looking for property downtown. He won’t disappoint.

Abdullah

-

Hey Ari, I’ve had a few experiences with agents trying to find me a unit in the past, and not all of them I’ve had a helpful experience with. Ari was very friendly and attentive to my needs. It was clear he understood what I was looking for and provided me with lots of great options! He found me a great unit under my price range that I love and made the process of applying and renting it so easy. He did all the leg work and the only thing he needed me to do was sign my name. If anyone is looking for an agent to help find them a place to live I’d send them to Ari without a doubt.

Megan D

-