How to Come Out On Top in a Bidding War

07 October 2019
Robert Greenberg Team

You've finally found the perfect home in the perfect area, you've sold your old home, and everything is more or less settled before your triumphant move.

The final thing to discuss with your seller and his or her agent is...price. A timeless ritual as old as haggling car prices, you need be prepared before you enter the bidding war arena. Otherwise, you may take a financial beating similar to Blackberry.

Here are a couple of tactics to employ so you don't get burned in a bidding war:

No Emotion

Home buyers can learn a thing from Kawhi Leonard's brief stay in Toronto. The most robotic personality in the NBA showed no emotion throughout his tenure with the Raptors, and it's a good idea to use that stoic approach in your bidding war.

Purchasing a home will be an emotional process, considering it's likely the biggest purchase and investment you may ever make in your life (that's a lot of pressure, eh). Having said that, even if you're dreaming about all those patio BBQs you can have at this new home, the best you can do is put your best offer forward, and accept the outcome.

Don't get caught up in the excitement and hype of winning the bidding war and getting your dream home. Stay even-keeled and level-headed, or you're in for a future of buyer's remorse.

Cash is King

When there are multiple offers all within the same range, cold, hard, instantly-gratifying cash has the advantage. Besides making an offer they can't refuse, cash is the best way to light up a seller's eyes.

And no, it's not because everyone loves cash. It's because cash allows sellers to skip over parts of the buying process. With a cash offer, the seller doesn't need to worry about whether you can navigate complex mortgage agreements to complete the sale. Cash means no roadblocks, no third-party barriers, no further questions.

Look Past the Ask

While the highest price is almost always the winner, you should throw any asking price out the window.

It's irrelevant. Just because the seller has listed a certain price, and the realtor agrees with that certain price, doesn't mean that's the value of the house (it rarely is). The only price that matters is what someone, like you, is willing to pay for it, not the number that's been arbitrarily set.

Bully ‘em

If you absolutely must have a certain Toronto property, and you're okay with paying more than asking, or you just hate losing a bidding war, you could always go all-in with a bully offer. Submitted on the eve of offer night, you'll deliver a price that's high enough above asking to have the owner agree before a potentially disappointing offer night. 

This tactic puts the pressure on the seller, though in most cases – especially in hot housing markets like Toronto – sellers will reject bully offers to see what awaits on offer night, for better or worse. FOMO is a powerful drug.

If you're not the negotiating type, Robert Greenberg and his team of Toronto realtors can help you find the perfect home at a price that makes sense to you. Get in touch and let's have a chat.