Gird your loins, Toronto. It’s happening all over again. Remember that insanely wild seller’s market in 2017? Word on the street is that it’s rearing its ugly head in neighborhoods all across the city as I write this. Reports of bidding wars with astronomical numbers of offers have begun to surface, leaving potential buyers in its devastating wake.
With this type of market seemingly upon us there’s inevitably going to be a heavy dose of bidding wars, the bane of every buyer’s existence. What often results are many buyers who express their distaste for the process and refuse to get involved. But is it wise to avoid these properties altogether? I suppose so. But let’s look at the most common reasons for avoiding bidding wars and how best to rationalize them. Perhaps you’ll find they don’t have to be as scary as they’re often portrayed.
“Anthony, I hate feeling rushed!”
Properties priced for bidding wars seemingly come and go in the blink of an eye. Five or six days may not seem like a long time when you’ll likely want to make multiple visits to the property and conduct all your due diligence whether that be via inspection or obtaining professional quotes for potential repairs and renovations. Oh…and you have to do it all in the course of your normal everyday life.
Personally, when I hear this retort I see it as an issue of circumstance rather than personality. I’ve often found buyers who express their displeasure for being rushed are in the early stages of preparing to buy but they’re not desperate or even truly prepared to make a purchase yet. Buyers who are truly ready typically have been looking for awhile, have perhaps even lost out on multiple homes and can’t stand the thought of waiting much longer to secure their dream home.
However, there are some buyers who are just extremely short on free time and some buyers that do struggle with making big decisions in ‘crunch time’. For those individuals I would suggest trying 3 simple steps:
- Try to view the property within the first few days on the market. The sooner the better, especially for those who need more time to process their thoughts and feelings.
- Don’t stress about the due diligence. Your Realtor should have a variety of contacts for various jobs and will help you obtain appointments on short notice if need be.
- Review all the information (pros/cons, comparables, inspection details, repair costs, etc.) with your Realtor to determine whether you should proceed with an offer or keep looking.
“Anthony, I don’t want to end up getting caught in the madness and overpaying”
This is fallout from 2017. There were many stories of buyers getting carried away and then experiencing ‘buyer’s remorse’ when they couldn’t secure proper financing or the home dropped in value. I’d be lying if I said I wasn’t witness to seeing a fair number of winning bids that were hundreds of thousands of dollars ahead of the second best offer.
That being said, this fear shouldn’t deter you from bidding wars. Work with an agent you trust, decide on pricing strategies with concrete numbers and if you stick to them win or lose, you won’t get caught up in the hype. Selling agents will almost assuredly try to get you to improve your offer no matter how strong it is. Don’t feel pressured by that, after all, you may already be in the top position and be betting against yourself. There’s nothing wrong with going in with a great offer and sticking to that price.
“Anthony, I can’t handle the emotional rollercoaster”
By far the most difficult objection to handle. Being on the verge of buying your dream home comes with all sorts of raw emotion, expectation and excitement. Losing your dream home, well…it just plain sucks at the time. And it’s not uncommon for buyers to have multiple lost bids in a strong seller’s market before finding success. ‘Buyer fatigue’ was a real phenomena that affected many buyers and forced them to remove themselves from the seemingly vicious cycle, at least for a period of time.
There’s not much that can be done to alter your psychopathy, we are who we are! Just try your very best to curb any and all expectation when offer night rolls around. Hope for the best, plan for the worst. And if that cliché offers you no comfort, know that if your bid is unsuccessful there will be a great new home that becomes available right around the corner, probably even literally. We often have buyer clients who have moved into their new homes express relief that their previous bids were unsuccessful as otherwise they wouldn’t be in the home they now love and much prefer. There’s always a silver lining. You just need to keep your cup half-full.
Sellers are just regular people who want the best sale price for their home, there’s nothing sinister about that. There’s the odd person that will push too aggressively and act greedy but that’s usually not the case. And you can just as easily run into a greedy Seller on a property that’s not poised for multiple offers. There are no escaping bad apples in this world, sadly.
Don’t get me wrong, we’re not huge fans of bidding wars at Advocate Realty and we LOVE clients with a strong moral compass. But we’d also suggest that you don’t cut off your nose to spite your face. Most of the time this process is carried out above board with all potential buyers on a level playing field. And should you ever come across a greedy seller you can opt to take your business elsewhere.
The bottom line is that there’s a large chunk of inventory that buyers will miss if they opt not to partake in bidding wars. If that’s your choice I will always respect it. Just don’t make such a bold decision without knowing all the facts as misinformation can make bidding wars seem more gut-wrenching than they truly are. If you ever have any questions about the process, don’t be shy. Please feel free to reach out