Today’s real estate market in Toronto must be downright scary for first-time or inexperienced buyers. Soaring prices, insatiable demand and competition that seems to be pulling out all their tricks to gain the advantage.
As a result, one of the biggest mental hurdles I find with inexperienced buyers is their reluctance to offer on a home poised for a bidding war. Unfortunately, if it’s a decent home at a fair price, chances are you’re going to be competing against other buyers. There’s just no way around it. Most inexperienced buyers are so concerned on the end result of who’s going to win, they lose sight of all the important factors leading up to that result.
If you find yourself in what will most likely be a bidding war, here’s my best advice to you: don’t focus on winning or losing, focus on putting yourself in a position to win. There’s a huge difference!
You often hear golfers talk about putting themselves in a position to win. Why? For starters, it’s usually a four-day tournament and nobody is crowned winner in the first couple of days. They can’t win on Thursday or Friday, they’re simply in the process of competing. Their sole focus is on doing the things necessary to get them into contention when the final few holes are played on Sunday.
Golfers also find themselves up against 150 or so competitors for each tournament. If you’re a rookie golfer or not as skilled as some of the best, your odds of winning are sometimes 1 in 200…or worse. Talk about terrible odds! If you’re focused solely on your odds of winning, it may cause you to question your abilities. It’s understandable as many people have this mentality when faced with a seemingly improbable task.
However, golfers know they can only take it one round and one shot at a time. They’re not concerned with what the other golfers are doing (unless they’re paired with Tiger), but rather only what’s within their power. Their goal isn’t necessarily to be leading but rather to be hovering around the top few pages of the leaderboard. They know if they’re in that top core of players they’ll likely have a shot of winning come Sunday.
Putting Yourself in Position to Win
There are plenty of important things that need to be done prior to offer night and on offer night that are essential for putting yourself in great position to be a successful buyer. Here are a few of the important ones:
#1. Ask lots of questions – the more the merrier. Knowledge is power and you deserve to have all your questions answered before taking the plunge. Remember, there’s no such thing as a dumb question. Don’t ever feel like you’re burdening your Realtor…that’s our job!
#2. Find the right Realtor – since you’re going to be asking lots of questions, and some agents don’t like the hassle of working with inexperienced buyers, it’s important to find one who is patient, thorough and understanding of your situation. Make sure they are a good fit for you and don’t be afraid to ask them questions about how they operate. Your agent is your most valuable source of real estate information.
#3. Research – we send listings to our clients pretty regularly, and for the most part they are relegated to the “pass” pile. However, as inexperienced buyers it’s important to still pay attention to these listings and their sale prices, even if the actual home itself is of no interest to you. The more listings and sale prices you research, the greater your knowledge of the market. Then when it comes time to offer, you will be much more comfortable and competitive.
#4. Complete all your due diligence – going in with a conditional offer is not putting yourself in a good position to win, so complete all your due diligence as it pertains to things like pre-inspections and financing. New buyers often don’t like the idea of spending money on a pre-inspection with no guarantee of getting the home. There you go worrying about winning and losing again! Focus on the fact that it’s a must to give yourself a chance to win in a multiple offer situation and that it will provide you with peace of mind in regards to the quality of the home.
#5. Don’t get nitpicky with the seller – try to give the sellers everything they want in terms of negotiating points like closing date and fixtures they want to keep. If those things aren’t of grave concern to you, don’t make a stink. If the two top offers are close, these factors have and will come into play.
#6. Be mentally prepared – be prepared for anything to happen and don’t have any expectations or pre-conceived notions of how it will play out. Offer nights can be brutally long, exhausting, and an emotional rollercoaster. Don’t over analyze. Take it as it comes. Trust that you’ve done everything right up until this point, and that you’re submitting a great offer. Try to find somewhere close by to hang out and grab a coffee. Otherwise you’re going to be needlessly trying to gauge the competition outside of the home.
So remember, don’t focus on what seems like an improbable chance of winning. The highest bid doesn’t always win. Just do all the right things and put yourself in the best possible position to win. You might just end up with a brand new set of house keys.