Between searching real estate listings, open houses and a million and one other checklists and stresses lies the bidding war. Competing with other buyers is often a reality in a hot real estate market, but with a little research and extra planning you may be able to snag the home of your dreams.
To stand out for example, when a house is going for $300,000, you don’t necessarily have to bid a cool $300,000. Bidding $301,000 seems uneven and might look like an odd number, but it will make your bid stand out from the rest and could beat out other attractive bidders by just enough. As well, look to see if there’s one particular thing that make the vendors sell instantly – added incentives like covering the closing costs, offering to buy that big air hockey table in the basement so they aren’t stuck moving it or finding out of they have a closing date in mind and doing your best to help them make it work. It’s also a good idea to set aside a small fund for a home inspection of the home you’re intending to bid on, typically one per cent of the total price. It will allow you to learn about any large problems before you bid, as well as perhaps narrow down the playing field if there are other ideal homes that fit your specifications in the area.
Do be aware enough to try not to fall for the current state of the home, meaning any decor such as draperies or carpets that look permanent. Once the house is bought this could vanish as many homeowners use professional stagers or furniture just for the open houses and selling process. Be sure to see the house a few more times before deciding, too. Some potential homes can make a great first impression but show cracks the second or third time. Going back for more might also help you establish a connection with the sellers, and they could look at your offer favourably.
There’s a real estate saying, “buy the most expensive house you can afford.” It doesn’t mean don’t live within your means, but instead plan for the future – buying a smaller, cheaper house within your price range may feel good because of the savings, but what if down the road you need extra space that your new house doesn’t have? You’ll be dealing with the moving process all over again. It makes sense to sometimes go with the highest price you can afford and it will pay off in the end.
Finally, be financially prepared. Get pre-approved for a mortgage so you can know your options and the amount of financing available to you. Being able to put down a larger deposit will also show vendors that you are serious.
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