8 Ways to Win a Real Estate Bidding War

Bidding War – How to Win

 

bidding war

 

The real estate market has finally taken a breather after many months of frenetic activity and relentless price increases.  Buyers are able to breathe easier, as one of the hardest realities of the recent market – the bidding war – is taking a break. But will the real estate market come roaring back? Many people in the industry are predicting that it will. The supply of available housing stock remains as tight as it ever was. Will we get back to the bad old days when every listing had multiple offers and a bidding war?

Now may be a good time to review the techniques and strategies of how to win a bidding war in an aggressive real estate market. Here are 8 pointers on how to be in the winner’s circle at the end of the evening:

(1) Include the bank draft for your good faith deposit with the offer
Sellers always worry that a buyer could be over extending themselves in a bidding war. The worst case scenario is when a buyer feels remorse the next day, before they have their bank draft deposit in hand. What if they decide to back out? This creates a nightmare scenario for the Seller, who may have turned away a dozen other offers, and is now faced with a Buyer who wants out. Legal implications aside, having the certified cheque or bank draft with your offer shows that if they select your bid, there won’t be a problem with buyer’s remorse in the morning. If your bid is not the winning one, you can return the bank draft cash to your account, with no extra fee or wait hold time from the bank.

(2) Have your mortgage provider do an appraisal before the  making the offer
When a bank offers mortgage funds for any property, they will always have a professional appraisal done as part of their due diligence. Typically the buyer pays for this, and the appraisal is done after the sale. Occasionally, when a bidding war gets carried away, the eventual selling price is higher than the appraisal says the house is worth. At this point, the buyer has a problem – they will need to increase their downpayment to get the mortgage funds, and to stay within the bank’s allowed parameters.

By paying for a bank appraisal before the offer date, you the Buyer then have a ability to show a nervous Seller that you have enough cash for this eventuality. By knowing the appraisal value upfront, you can make it clear that you have the extra money needed, that is extra money that won’t be in the mortgage loan.

(3) Include a personalized note about yourself in the offer 

Try and personalize your offer. Write a note and include a photo to give an idea who you are and who is moving into the home. Tell them something about yourself. Many Sellers have lived in the same house for years, and they care about their neighbours, and about their neighbourhood. When you show them a bit of who you are, you essentially humanize your offer, and this can sometimes make the difference in which offer the Seller selects.

(4) Your offer must not have ANY conditions

In a hyper-kinetic real estate market, the old way of doing offers is dead. What used to be normal practice – including conditions on financing, house inspection, lawyer’s approval, status certificate and so on, is no longer acceptable. When you are in a bidding war, there can be no conditions attached to your offer. It is also no longer possible to offer a price to be paid on the condition that the owner undertakes some bit of care or maintenance. If you need an inspection, arrange that beforehand.

sold over asking

(5) If you make a bully offer, it had better be substantial

One of the most extreme tactics in a bidding war is the bully offer.  It works like this: When the house comes on the market, there is usually a date specified in the MLS listing, when offers are welcome, a date which is usually several days in the future. The bully offer ignores this date, and is submitted in the hopes that the seller will be so impressed that they will take it, rather than waiting for the offer date and the submission of other bids. It stands to reason that any bully offer must be extremely strong, in order to convince a seller to ignore any future bids.

(6)Prepare yourself mentally and learn as much as you can

At the risk of stating the obvious participating in a bidding war can be very stressful for a buyer (and indeed for a seller). Maintaining a calm, balanced state is essential to winning a bidding war. Make sure your real estate agent is experienced in bidding situations, and learn as much as you can from them. Be philosophical – sometimes you may win, other times it’s just a “practice run”. Try to keep anger and frustration in check, because those emotions will never give you the winner’s edge.

(7) Know your limits

You may find yourself up against another buyer who is reckless, and willing to pay any price to get the house or condo. Be prepared to walk away if you are bidding against someone like that. Set a limit of what you are prepared to pay, and respect the limit!

(8) Remember the Big Picture

Real estate prices go up, and they sometimes go down (although historically, they have been in a solid upwards trend for decades).  The house that you paid big bucks for today may go down a little in value at some point, and you don’t want to ever have to sell your house at a loss. So keep everything in perspective. Remember that even in a flat market, you will need to live in the property for a couple of years at least, to cover the expenses incurred when buying and selling.

Participating in a bidding war can be exhilarating if you win, and devastating if you don’t. By preparing and using some of these pointers, you can increase the odds of coming out on top. We hope you have found these tips on how to win a bidding war useful.

 

with thanks for local realtor contributions

 

Probate Process in Real Estate

PROBATE

Probate for Real Estate

Probate is one of the issues that comes up when people inherit a property. The process of probate can tie up the sale of an inherited property, and will prevent or delay any closing of any agreement to sell the home,  until this process has been completed. So what is “probate”?

Probate is a legal process triggered by the death of someone who owned property. Probate determines the validity of the last will and testament (or that there is no will) and the identity of the beneficiaries. If the person who passed away died without a will (intestate), then probate determines the identity of the heirs. Probate exists in both the U.S. and Canada, and although this article is being written from a Canadian perspective, the principles remain the same for both countries. In Canada, each province has differing rules on probate and each province has different specifications on what documentation is required as part of the probate process.

Typically when someone dies, and they have a will, there is a designated executor of the estate. The designated executor will usually hire a lawyer to facilitate guiding the estate through probate and the dispersion of assets.

Components of Probate

Probates have four main components: (1) the application process; (2) identifying and managing the assets; (3) paying off the debts of the estate, if any (4) distributing the balance to the beneficiaries.

Probates protect the interests of the estate’s beneficiaries and creditors by ensuring the orderly distribution of assets and payment of debts/expenses. Paperwork is typically filed by a lawyer, and court appearances may be required. Will probates can take 6 to 9 months or more to complete, and until the process is finished, you will be legally unable to sell the inherited house. If you accept an offer to sell an inherited property that is going through the probate process, it will not close on closing day, unless the probate has been completed.

Probate homes can be listed and sold, however,  provided that there is a clause included in the offer, that the sale is conditional of the successful completion of the probate process. Otherwise, if there is no such clause, or if the sellers fail to disclose that there is a probate in process, if there are delays in closing, there can be ramifications wherein the buyer seeks compensation.

There are ways that owners of real property can avoid the probate process before they die, saving their heirs a great deal of trouble. One such strategy is the Living Trust. A living trust is a  technique in which a trust is created while the owner is still living, and the real property is transferred into the name of the trust without giving up the possession or control of the property. When the person passes away, the home can be distributed directly to the beneficiaries named in the trust. Using this strategy, probate court is avoided.

There are other strategies to avoid the cost and time of the probate process, but these are legal matters, and anyone interested should check with an experienced real estate lawyer or accountant, for further advice.

Luxury Homes

Miami luxury homes
Miami luxury homes

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Their eye for information and also ‘can do’ attitude make certain an excellent quality product, makings them happy winners of several master building contractors Australia honor for quality. The masters home builders honors are testimony to their higher requirements. The acclaimed high-end new residence constructions offered by these building business have actually arrived around the globe over for their one-of-a-kind appeal as well as attention to detail.

An excellent building contractor always care for the details and assurance’s you an enjoyable experience in order to give your high-end created house its unique character that can add value to your new residence building as well as enhances your way of life. A real custom-made luxury designer developed house needs to deliver the feature you require along with the appearance you love and be flawlessly suited to your dream place. Certainly, the building contractors in Australia utilize all of their experience and knowledge to direct you via the maze of style alternatives as well as make your personal iconic site. Each and every high-end developed homes is put through the most extensive quality assurance to guarantee your residence is effortlessly constructed.

Architects for Luxury Homes

Six benefits of dealing with an architect who specializes in luxury homes:

1. Customize to your taste: luxury homes can be designed to suite your own personalized wants and needs. Add your personal touch to floor plans, fixtures, and a wealth of amenities both interior and exterior to the house

2.High quality: As these residences are developed with fantastic aesthetic charm and also are paid unique focus on rear and also side altitudes, you can find them appealing from all angles.

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Mississauga luxury homes

Toronto September 2013 Real Estate Market

September Shows Strong Sales and Rising Prices

The Toronto real estate market reported 7,411 residential sales processed through the Toronto MLS system in September 2013, representing a 30 per cent increase compared to 5,687 transactions reported in September 2012. So far this year, total resale residential sales in the Greater Toronto Area amounted to 68,907 properties sold during the first nine months of 2013 – a slight drop of  one per cent compared to the same period in 2012.
“It’s great news that households have found that the costs of home ownership, including mortgage payments, remain affordable. This is why the third quarter was characterized by renewed growth in home sales in the GTA. We expect to see real estate market sales up for the remainder of 2013, as the pent-up demand that resulted from stricter mortgage lending guidelines continues to be satisfied,” said Toronto Real Estate Board President Dianne Usher.
In the Greater Toronto Area, the real estate market showed an average selling price in the month of September of $533,797 – up by 6.5 per cent year-over-year. Through the first three quarters of 2013, the average selling price was $520,118 – up by over 4 per cent when compared to the first nine months of 2012.

Real Estate Market Trend

The MLS® Home Price Index composite benchmark for September was up by four per cent year-over-year. The annual rate of growth for the composite benchmark has been accelerating since the spring of 2013.
“The price growth story in September continued to be about strong demand for low-rise home types, coupled with a short supply of listings. Even with slower price growth and month-to-month volatility in the condo apartment market, overall annual price growth has been well above the rate of inflation this year. We expect that this scenario of continued growth and price appreciation will continue to play out in the local Toronto real estate market throughout the remainder of 2013, and we forecast that trend to continue into the next year.