How To Handle A Bidding War.
STICK TO YOUR BUDGET
Getting pre-approved for a mortgage before you start your real estate search in Toronto is an absolute must.
What does this actually mean? Your credit has been checked and all your documentation has been approved for a specific loan amount for a specific period of time. The point of doing this is to give you a specific idea of just how high you can go with your offer. So always stick to that budget. You don’t want to get in over your head.
Keep in mind however, that just because you can hit that amount you’re approved for, doesn’t mean you should. It’s always good to ask yourself what can you afford and also what are you comfortable spending on a monthly basis.
To get a true sense of affordability, always be sure to look at both the listing price and the monthly carrying costs. You don’t want to loose a bid on a difference of $200 a month but you also don’t want to end up house poor.
Paying more than you initially set out to pay may help you win the bidding, but if you end up paying more than the actual market value of the house, it’s going to take you a lot longer to realize a capital gain on the property.
PUT YOUR MONEY WHERE YOUR MOUTH IS
Always, and I mean always bring a certified cheque for the deposit to include with your offer. This act may be simple and irrelevant to a lot of buyers but it shows the seller you are serious and ready to do business. It’s also often a good idea to add in a little personal touch to the cheque, such as a hand-written letter. Just like you, sellers are also experiencing their own emotions and it’s comforting knowing their home is going to someone who is interested in making a home, not just buying a piece of real estate.
KNOW WHEN TO QUIT
Don’t feel bad about having to bail out. There are plenty of houses on the market and new ones being listed every day. Ask anyone that has eventually bought a new home and who has gone through and lost out on other offer, they almost always say that the house they eventually ended up with was the one that they were actually meant to own