Over the past year, the rising prices of real estate in Vancouver has created a competitive environment for buyers. It is not uncommon for listings to be under-priced with a deadline set for offers. In these situations, the listing agent is intentionally trying to create a ‘bidding war’. For first-time home buyers or buyers who have not been through this process before, it can be confusing and stressful. Even many agents have difficulty navigating multiple offer situations with skill and strategy.
Below, we are going to discuss the five basic components of an effective multiple offer strategy and how to win.
Market value
Many buyers get preoccupied with ‘how high above list price’ the offer price should be. To our buyers, we explain that the list price is not necessarily important. Rather, we perform a detailed, comparative analysis by assessing the most similar, most recent sold properties and comparing those listings to the subject property. The goal and outcome of the analysis is to assess the current market value of the subject property. When this number is produced, this is the number that we recommend being used as the offer price. Sometimes, there may be variances depending on other factors but this is generally our recommended strategy regarding for determining the offer price.
Dates
Sellers often have preferred completion and possession dates. We work with our buyers in coordinating on their end so that these dates can be provided or to agree on something as close to those dates as possible.
No subjects
We always recommend trying one’s best to submit the offer with no conditions. This may mean carrying out the inspection in advance of the offer deadline. It may also mean working aggressively alongside the buyer’s mortgage broker to achieve a financing approval prior to the offer deadline. If this ends up not being possible, then at least minimize the number of days that the financing condition is in place.
Copy of deposit cheque
A no-subject offer is not considered a firm sale without the deposit being submitted. Therefore, we ask that our buyers prepare their deposit bank draft in advance of submitting their offer. Along with the offer, we submit a copy of this deposit cheque. This is extra-tempting for a seller as it means that if they sign the offer and accept it, the property is sold firm right away. This is different from what is most typically seen. Most subject-free offers then allow for 24 hours for the deposit to be submitted. This means the seller has to wait another day until they can consider their property to be ‘sold’.
Letter to the seller
Humans are emotional beings (to varying extents.) We always recommend that our buyers write a ‘Letter to the Seller’. The purpose of this letter is to explain to the seller why the buyer loves the home. We ask our buyer to describe features or updates that they appreciate and the details that resonate with them. Most people love their homes so knowing that their home will also be loved and appreciated by the next owner can make the seller happy — and make their decision easier. Also, we ask that our buyers explain a little bit of their ‘story’ in their letter. Providing some details so that the seller gets a positive sense of who the buyer is as a person can also help build an emotional connection with the buyer. Ideally, there might even be some common ground.
If you are looking for information for a comprehensive overview of local Vancouver buildings and neighbourhoods, or have further questions on how to win a bidding war in Vancouver don’t hesitate to reach out!