I remember very vividly the night of 37 offers. I was smack dab in the middle of a bidding war out in Applewood in east Mississauga.
The home was detached, 3 beds and had a separate entrance and basement apartment. It was the kind of home that everyone is looking for these days. I have buyers all the time wanting to offset their mortgage costs with rental income so these types of properties are still in high demand if the price is right.
There was one issue with the place though. It was a complete dump. It needed to be completely stripped to the studs.
You’d think that would make people shy away from it, but sadly that wasn’t the case. The list price only made it all the more tempting and by 5pm on offer date there were 37 offers on the property and counting.
And as you can probably guess the home sold for a lot more than list price.
How to Win Multiple Offers Against the Competition
Sometimes you’re in a blazing hot real estate market like in 2017, 2021 or early 2022 where 37 offers on a home isn’t incredibly rare.
And sometimes you find yourself in a more balanced market where an attractive home comes to market with a purposely lower listing price and garners 2-6 offers.
Either way, your initial approach to how to win multiple offers is going to start out the same. Let’s take a look at the common strategies people use to win in these situations.
How do I win a multiple offer scenario in the GTA?
The steps are simple:
- Get pre-approved: The first conditional clause that gets removed from most offers to purchase is the financing condition. This means that you are confident your mortgage will get approved by a bank. If you have been working closely with your broker and completed all the necessary documents then you should feel confident removing this condition.
- Do the home inspection before the offer: This sounds crazy right? Unfortunately, especially in hot markets, this is pretty much required. Most multiple offer winners are doing the inspection before the offer and then removing this clause to make their offer stronger. Some are just removing it entirely and crossing their fingers, though I don’t recommend that approach.
- Budget to go over asking: By how much really depends on how closely the home is listed to true market value and the current conditions of the market.
- Have your deposit ready: Prepare a deposit cheque (a bank draft) with your offer to make it the ultimate FIRM offer (no conditions + deposit cheque = binding agreement to purchase).
- Line up closing dates: Whatever closing date the seller wants be prepared to give that to them.
Keep in mind this is not necessarily the case for every multiple offer scenario. If you’re up against 37 offers or 2 offers, strategies are going to be adjusted a bit.
This is where the experience of your realtor needs to come in to play to help you win multiple offers.
What else can I do to win against multiple offers?
The average buyer interacts with the market maybe once every five years and in that time the market can change drastically. So, first and foremost, it’s incredibly important to work with a real estate agent that exclusively represents your interests.
Next, there are a couple of interesting tactics used by agents to help win multiple offers and, no, it’s not to just give the seller more money.
The Love Letter/Video
To stand out from the sea of offers, buyers have written letters to make their emotional plea to sellers.
A newly married couple, a new baby, anything that might help the seller choose them over another buyer if the offers are very close.
While it used to be done by letter, nowadays a video can be even more impactful.
Will this alone help you win against better offers? In my experience, no, but if the offers are fairly close I have had success with this strategy.
But, you’re not going to get the home for under list price and full of conditions. No seller is going to be that generous.
What do I need to expect if I’m up against multiple offers?
Depending on the market, you will need to expect that the winning offer is going to be “clean” aka no conditions.
This is not always the case especially in balanced markets. Often, a condition left in the offer with a superior price or closing date will get the job done. But do expect to keep that conditional period shorter.
Perhaps instead of five business days for financing or a home inspection, you can get things wrapped up in 1-2 business days instead.
Either way, it’s best to lean on the experience of your real estate agent. If they’re anything like me, they’ve been through hundreds of them over the last 15+ years and that kind of insight and experience can be the difference.
This can be a very emotional and frustrating process, so lean on them for guidance and advice.
