This week I will be answering a few questions from our followers.
In a high demand, low inventory market, how do you approach the search for a new home and not be frustrated and disappointed when losing in a multiple offers scenario?
This is really a two-part question. The first part of the question: How do you approach the search for a new home? This remains the same in any type of market - multiple offers or Buyers market. The very first step is to get your ducks in a row with respect to your financing. You should not even consider getting into a multiple offer situation unless you know where you stand financially. However, for the purposes of this blog we will assume that you have been pre-approved for your mortgage and are looking at appropriately priced homes.
A great place to start is to take the time to decide what you want. Make a "wish list" of everything you want in your new home from the number of bedrooms to the size of the yard and everything in between. Have some fun with it. The next step is to decide what you are willing to compromise on. This is especially true if you are purchasing a property with a partner. If you find yourself in a fast paced multiple offer situation and have not had this discussion, one of you my feel forced to make a compromise, which you really did not want to make. This can lead to future resentments and difficulties in the relationship. Some couples have the same vision for what they want and what the are willing to give up which makes the process and decision making much easier. Take the time and have the discussion!
The second part of the question is: How to avoid being frustrated and disappointed when losing in a multiple offer scenario.
Of course the best way not to be disappointed is to get the property and there are ways to position yourself to stand out from other offers.
However, let's say you have 6 offers in a multiple offer situation. Obviously 5 of those Buyers are going to go home empty handed. Let's face it, it seems in many cases the actual value of the property goes out the window and you are faced with simply trying to out bid your competitor. It is at this point that we need to keep the emotions in check and introduce some common sense and perspective. The best way to avoid being disappointed if you do not get the property is to have started off writing a good offer with respect to terms, conditions, dates and price. The most challenging aspect is the price as you have no idea what the other Buyers are "willing to spend.” This is the key: when writing your offer, decide what you are willing to spend for that particular property. This number should represent a price that you will be happy with if you are the successful offer and content if you are not. This way you won't be second guessing yourself: "should we have gone up another 5 grand" or "did we pay too much"? The time for that discussion is before hand so that you have peace of mind through out the process. It is amazing how much stress it relieves.
If you would like to have a chat and talk more about strategies that will work for you or have a question for my blog, contact me here.