How to compete (and win) in a bidding war in London Ontario..

If you're looking to buy in London right now, it shouldn't come as a surprise that you will more than likely be faced with a "multiple offer" situation if you find a nice house that's priced well.

I recently took my client to a house that had been listed 3 times, was completely vacant, overpriced, and needed a ton of work (this particular client is looking for an investment opportunity). We decided to put in an offer- and OF COURSE another offer came in that day.

So I wanted to talk a bit about how you can keep your wits about you and go into (and come out of) a multiple offer situation with the best result possible (and no- I don't think that always means winning at all costs).

Of course the best way to deal with this situation is to avoid it entirely. Not always possible but you will increase the odds of being the first (or only) offer if you check your listings regularly and see things the same day they list.

If you are actively looking make sure listings are being sent to you live as they list (not at the end of the day) and check every couple of hours. Let your broker or sales rep know if something catches your eye so they can book a showing (or preview it for you) the same day. If you think something might fit the bill- you should come prepared with the paperwork you will need to offer. I'd rather spend the 15 minutes I need to prepare everything "just in case" than waste precious time arranging to get everything signed off AFTER the fact.

We are noticing a trend of more listings are delaying showings and offers in an effort to drive competing bids so this won't always work- but it's a good best practice to get in early and be prepared to act fast.

In the offer itself there are a few things you can do to increase your odds of coming out on top.

The obvious answer is making your purchase price higher than the other offers- but there is no way to know what the other people offering are willing to pay. Nor should that pressure you to offer more than you are comfortable paying for a property. Paying above list is one thing- depending on if the sellers intentionally priced low to drive more interest or if they simply underestimated the value of their home there may be good reason to offer more than a home is listed for.

Paying more than a home is worth is different. Looking at comparable houses that have sold recently- does the price you are offering make sense? If you are funding the purchase with a mortgage- will your lender need an appraisal? What are their stipulations of lending more than the value of the home? How soon will you be moving again? Would you be comfortable selling for close to or less than the price you paid if the market softens in the interim?

Sometimes a home's value to YOU is different than the value on paper- that's fine. If you've found your needle in the haystack and you don't mind shelling out the extra cash and are sure you can get it financed- enjoy your dream home and treatyoself.

Always remember to go into a multiple offer situation with your best foot forward. Picture your future self getting the call that your offer WASN'T selected but an offer of X$ was. Would you be kicking yourself hoping you had gone a BIT higher?

Other than the price there are a few other ways you can make your offer look better to the seller:

Often listings will list close dates looking something like: "60 days" or "flexible". That doesn't tell you much. Ask the listing agent- what's the seller's dream close date? If you can be flexible and line up to that date especially if it's not the usual time frame in your market- your offer is going to look MUCH more attractive to the sellers. Maybe they purchased a new home and don't want to carry two mortgages for a month or maybe they haven't yet found a home and want as much time as possible to do so once theirs sells. You don't know until you ask.

Keep the conditions simple and the timelines tight. One way to limit the conditions on the offer is to bring a trusted contractor or home inspector with you to view the house before the offer. This way you can do a preliminary inspection and avoid putting a condition of home inspection in the offer. An offer without an inspection clause is MUCH more attractive to a seller.

Include a decent deposit. More than average in your community. This will show the sellers you are serious, secure and more likely to close on the deal and can tip the scales in your favour if the offers are close.

Finally, don't be afraid to send in your offer with a bit of information about yourselves. There is absolutely an emotional connection both to buying and selling a home. Many people would rather see their home they have raised their family in, that they have put so much work into caring for and preparing for sale go to a family rather than an investor or someone looking to rent it out- so don't be afraid to tell the sellers what made you fall in love with the property- or the area and why you are so excited to have an opportunity to buy their home

In bidding wars often the offers are so close- some of these tactics could give your offer the edge to win out. Good luck and happy house hunting and may the offers be ever in your favour.