5 Tips for Condo Buyers Facing Bidding Wars

BiddingWar

As we help our clients navigate the current market, we continue to see high demand for condos, especially at the lower-to-mid range price points. Many of our clients who have been trying to purchase since early January, have been repeatedly faced with multiple offer and “subject-free” competition.

A factor that may be feeding this demand is the launch of the BC HOME Partnership Program, lending first-time homebuyers up to 5% of the purchase price to use as a down payment for homes under $750,000, interest-free for the first 5 years – learn more about the home partnership program.

5 Factors to consider when facing multiple offers

Although price can be a key factor in “winning the bid”, here are 5 tips for condo buyers to strengthen their position in competitive situations:

1. CONFIRM YOUR FINANCING – ensure that you are pre-approved for a mortgage and that your financing is confirmed prior to writing an offer. Know exactly how much you are qualified to purchase. Have a clear, quick line of communication with your mortgage specialist prior to writing an offer so they can advise you on the specific property of interest.

2. PRE-INSPECTION – rather than including a “subject to inspection” in your offer, consider arranging an inspection prior to making an offer.

3. ALIGN DATES – if possible, align your dates with the preferred Completion and Possession dates of the Seller to make your offer more attractive.

4. READ STRATA DOCUMENTS PRIOR TO MAKING AN OFFER – review all strata minutes, reports, bylaws etc. (if available from the listing agent) prior to making an offer. If you are comfortable with all the strata documents, you can exclude subject to strata document review and make your offer stronger.

5. UNCONDITIONAL OFFER – in some situations, you may want to consider making your offer “subject free.”  This should only be considered in situations where one has done their “due diligence” on the property (ie. home inspection prior to making an offer, reading and being satisfied with the minutes and financial documents of the Strata Corporation). It helps if you are familiar with the strata community, such as being a renter or having a trusted friend who lives in the building and is knowledgeable about the strata complex. Another factor to consider in making an subject-free offer, is to be in a strong financial position to buy the property for cash outright, or have the ability to put down a substantial down payment (ideally, greater than 25% of the purchase price), in addition, have substantial savings or financial support to draw from should you require additional funds for the unforeseen. Enough people seem to be in such a position that unconditional offers have became commonplace. Extreme caution is advised, should you consider taking this route. However, the reward for a buyer in making a subject-free offer, is that there can be a financial savings, as a Seller will often choose a slightly lower-priced offer that is subject-free over an offer that is higher in price but full of subjects and conditions. As the adage goes, “a bird in the hand, is worth two in the bush” … a subject-free offer assures a Seller an immediate final sale.

Seek professional expertise

It is important that you get the best representation possible to effectively navigate and negotiate multiple offer situations.  We, YourHomeTeam, have over 25 years of experience and expertise, helping hundreds of clients through all types of market conditions. Every home buyer has specific needs and each property has unique circumstances. If you are considering buying in the current market, connect with us, and we will help you strategize your purchase.  Call (604) 808-HOME(4663) or email info@yourhometeam.com

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