Bidding wars are relatively new in the County and while they don’t happen that frequently, hot properties and hot locations have been known to drum up multiple offers. So what’s a Buyer to do?
1 – Be prepared to move quickly. Don’t delay in seeing newly listed properties and be ready to make a quick decision. If you can see it and buy it before the weekend when most people will be available to tour it, awesome! If you’re working with a tech-savvy local agent, they’ll be able to preview the home and use video to help you beat the non-PEC competitors to a showing.
- Offered a higher than normal deposit ($1,000-2,000 is relatively normal here – we offered a deposit of $5,000)
- Didn’t have a financing condition (our mortgage broker was able to get us approval for the property BEFORE the offer)
- Performed our home inspection BEFORE the offer (this is almost unheard of in PEC, but it allowed the Sellers to feel comfortable that we weren’t going to back out of the offer or try to renegotiate price after the inspection)
- Made the offer conditional on septic and well inspection for a shorter than usual time. We weren’t able to schedule those inspections on the weekend, otherwise we would have done them in advance too.
- Offered $30,000 MORE than the asking price. Most bidding wars here are won with bids of $15-20K over asking, so our bid was certainly aggressive. When deciding how much to offer, think about:
- What’s the real value of the house? Asking prices aren’t necessarily indicative of the value of a property. It’s important to compare the sold prices of similar homes to see what it’s really worth.
- What’s the value of the house to you? This is a biggie. How will you be using it? Is there something special about the house that makes it worth more to you?
- How much will the extra $ cost you on a per month basis? In our situation, it was $30 a month. Totally worth it to us!
- What’s happening in the market? In a market where prices are increasing rapidly (like Prince Edward County), recognize that every sold property sets a new benchmark price…so you’ll want to bid higher than the last comparable sale.
- Gave the Seller their desired closing date
3 – Be prepared for Multiple Representation. There aren’t that many real estate agents in PEC, so it’s not uncommon for the agent who is representing the Seller to also have a Buyer for the property they’ve listed for sale. That’s called multiple representation, and while it’s fully legal in Ontario, it can get messy if there are multiple offers. The last thing any Buyer wants is for their competitor to have inside information or be at a competitive advantage because they’re working with the listing agent. If you find yourself in a bidding war in Prince Edward County, make sure your agent asks if any of the other offers are being represented by the Listing Agent….and if they are, ask if the Manager or Broker can represent the Seller so that all the Buyers are on an even playing field.
4 – Be strategic. If you’re in the midst of a bidding war, you want a knowledgeable agent on your side (and not one who’s participating in their first bidding war with you). Give us a call and we’ll connect you with the best real estate agents in PEC.
Want more tips on winning a bidding war? Check out the blog we wrote on our Toronto website: How to Win a Bidding War.