TOP 9 Tips To Get Your Offer Accepted When Competing

Buyers | 9-minute read

There is a lot of confusion and uncertainty when it comes to the state of the real estate market and what really to expect in the future.

With the rising interest rates and increasing inventory, we are moving from a seller's market to a more of a ‘balanced’ market or even a buyer’s market in some areas. Having said that, depending on the neighbourhood, type of property, and price range, bidding wars continue to be the reality for many buyers.

If that’s you, and you’d like to position yourself so that your offer has the highest chance of being accepted - here are my best tips!

1. Know Your Stuff

What I mean is that information is king in multiple ways. For one, you want to gather as much info as you can about the property and the seller’s ideal offer terms, conditions and preferred inclusions and exclusions.

Secondly, you need as much info as possible on the most recent comparable sales in the area, the locational influences, and potential future proposed changes to understand the true market value of the property. When we work together, I will help you with all of that and provide you with everything you need to make a good decision. Also, don’t forget the resale value. Something to consider if the market suddenly changes and the value drops.

2. Have The Right Agent In Your Corner

Of course, you knew I’d say this, right? I believe it’s crucial to work with a world-class, skilled, reliable, and reputable agent who possesses tact, courtesy and emotional intelligence and understands contract law and the implication thereof.

I realize that’s a mouthful, but it really is important. It’s frustrating when you work on a deal with a cooperating agent who’s supposedly been in the business for 25 years and yet still doesn’t know the difference between terms and conditions, nor how and where to insert them. One single word/sentence – or the lack thereof – can make all the difference in how a contract is representing and protecting you from any potential future liability and expenses.

3. Pre-Inspect The Property With A Professional

Unless you are fairly knowledgable and handy yourself when it comes to construction, and you’re 100% confident in the condition of the home, I would always recommend having a third party whom you trust preview the property with you and make sure everything is solid.

Personally, I don’t really care as much about an official report as I care about a neutral opinion and advice. Having this done in advance allows you to potentially write a ‘cleaner’ offer without the inspection condition - or discover the actual need for it.

4. Have Your Finances In Order

This is the strongest aspect of your offer, and if it comes with a solid deposit, the seller will feel confident in your offer. At the end of the day, you want the house, and they want cash - top dollar and no hassle. Having said that, cash isn’t always cash. An offer written as a ‘cash offer’ - in other words, no financing condition - can still fall through because you as the buyer might be ‘pre-approved,’ but the house might not be.

What do I mean by that?

Obviously, this is something you’d discuss with your mortgage professional, but in simplified terms, given the bidding war situation etc., a financing institution will be extra careful to confirm the value of the property before approving a loan to ensure they don’t get stuck with a piece of real estate that they wouldn’t be able to sell again and recoup their investment on, should the mortgagee (buyer) default.

If your finances are solid and the down-payment substantial, have a conversation with your financial institution and confirm that you are OK to write an offer without a financing condition and that there are no other conditions on your pre-approval letter that could make the deal go sideways.

5. Have The Right Mindset

You might not have thought about it, but it is important. How’s your attitude? What do you expect? What are you focusing on? Are you feeling defeated before you even go into the battle, or do you expect good things from life? Do you focus on all that could go wrong or on all that could go right?

Whether you believe it or not, your actions will always follow your beliefs. Your beliefs are the result of your thoughts. The good news is: You are in control!

6. Don’t Underestimate The Deposit

When it comes to writing a deposit cheque to accompany an offer, many buyers believe that it’s not a big deal if it’s just 1-2K. Why would you lock up a larger sum of money in someone’s trust account without getting interest on it? The reality, however, is that your deposit is ‘faith’ money. It shows how serious you are and can really make a statement - either way.

The moment you start house shopping, you want to make sure you have a solid and liquid deposit available at any time because when opportunity comes, it’s too late to prepare. We can discuss numbers when we start working together. Consider a home equity line of credit or any other line of credit your financial institution will recommend. If your offer is not accepted, the cheque must be returned to you immediately and without deduction.

7. Declutter Your Offer

I have to preface this. As agents, we want to ‘protect’ our clients’ interests. However, oftentimes and depending on the situation, that protection - aka terms and conditions - can minimize the chances of your offer being accepted. So it’s a bit of a dance that requires tremendous skill, experience and foresight.

In addition to a home inspection and a financing condition, there are a plethora of other conditions and clauses you might need to insert, and it’s something we discuss on a deal-by-deal basis as there is no rule of thumb - other than my fiduciary duty to fully protect your best interest.

Things that can strengthen your offer include the seller’s preferred possession date, as well as inclusions and exclusions and potential promises/warranties you might request.

Consider this scenario: If the preferred possession date was June 1 and the competing offer requests Sept 1 with a bid that is 5K higher than yours, their offer would be inferior IF the cost to carry the house for an extra three months (mortgage, taxes, utilities and insurance) would be higher than 5K. The same is true for inclusions. A set of high-end appliances could easily amount to 10-15K, and the inclusion or exclusion thereof, depending on what the sellers prefer, could make quite the difference for them. The bottom line is that we have to communicate well and often.

That’s how deals get done.

If I represent the buyer, I prefer to write the offer just several hours prior to the offer presentation - if possible. That allows me to get a good feel on the number of offers my buyer might be up against, and we can adjust the sails accordingly, depending on my buyer's comfort level.

Again, skill and experience matter. (As does spelling and neatness. We’ve all seen things like, “Offer excepted as written.”)

Another thing that can really work in your favour is to make sure your offer has sufficient time for presentation and acceptance. I’ve had offers emailed to me by other agents that were technically already expired by the time we were able to sit down with the sellers, with the note to just change the expiry date and have my sellers initial it if it’s accepted. Excuse me? What about the deposit cheque? Oh right … they’ll drop it off if the offer get’s ‘excepted.’ Would you call that a professional representation and a strong offer - regardless of the number and the conditions in it?

8. Be Available When Offers Are Being Presented

If offers are presented at, let’s say, 7 pm - you want to make sure you’re around. Now is not a good time to go out for dinner and forget your phone in the car. Stay close to the location where the offer is presented in case you need to initial some changes or accept a counter but do not ‘hover’ in a place where the sellers can actually see you. You don’t want to create any kind of pressure.

9. Decide On Your Highest Comfortable Number Upfront

This is key. My buyers will often ask me what I think they should offer, or better yet, how much I think the house will go for. Great questions, and the answers depend on where we started in this blog post - point #1. You want to look at the recent sales, the current inventory and days on market, as well as your home buying journey thus far, to decide what this home is worth to you.

I always advise my buyers to get very clear on how much they are willing to go up to before we submit our offer. Yes, I realize that in a multiple offer situation, you want to put your best foot forward and make your best offer right away. However, what if you’re only competing with one other buyer rather than with 3 or 4? No need to shoot a mouse with a shotgun, right?

What are you comfortable spending for this home - and still sleep at night?

What’s the number you’re OK with walking away from? Because some bidding wars just aren’t reasonable in the long run as here again - experience is everything. What might seem like ‘crazy’ aka a lot of money for a specific home and location to us locally … could be a steal of a deal to someone from a different province where home prices are a lot higher - comparatively.

So much more I could write as there is a lot to consider, but I hope this information was helpful to you and offered some valuable insight.