It’s that time again… Are you surprised we’re diving back into the topic of bidding wars? Over the past few years, Toronto’s real estate market has seen its share of highs and lows, shaped by rising interest rates, increased living costs, and shifting buyer confidence. However, with interest rates finally starting to drop, the brief buyer’s market is quickly giving way to a seller’s market, especially in the turn-key freehold property sector. The result? Multiple offers and fierce—think on fire fierce—competition among buyers.

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If you’ve ever bought a home in Toronto during a seller’s market—or know someone who has—you’re likely familiar with the stress of multiple offers and the dreaded bidding war. Competing with other buyers for quality homes with desirable features and adequate parking in sought-after Toronto neighborhoods is becoming the new norm. In recent weeks, we’ve observed numerous freehold homes in the west end selling with multiple offers—some receiving over 20 offers! (And yes, we’re serious!).

Feeling a bit overwhelmed? Don’t worry, it’s totally normal! Now’s the time to arm yourself with some savvy knowledge and strategies to smooth out your home buying adventure. Here’s how to navigate this competitive landscape and boost your chances of success!

The basics of bidding wars…

Before we dive into the strategies, let’s take a moment to understand what a bidding war is. A bidding war occurs when multiple buyers make offers on the same property on a designated offer date set by the seller, often resulting in escalating bids until one buyer emerges as the winner. This competitive environment can push prices higher and create a sense of urgency among buyers.

In Toronto, bidding wars can be particularly intense, especially for desirable properties in sought-after neighborhoods with features such as primary suites, renovated kitchens and bathrooms and multiple parking spots. Knowing how to navigate this process is essential if you want to come out on top.

Buying a home can be exciting AND stressful. But it doesn’t have to be the latter. Keep reading these blogs next to learn more about having a great buying experience: 

• Top 5 Ways We Speed Up the Process and Blow Away Buyers
• Can You Buy a Home in 30 Days?
• Red Flags to Look For When You’re on the House Hunt

Now, let’s discuss the important elements so you can stay competitive during a multiple offer:

1) A clean offer is a good offer

Before you even get to the offer stage in your house-hunting adventure, make sure all your ducks are in a row with your financing and that you fully understand the home buying process in a competitive market. When you’re finally ready to submit your offer, aim to make it as clean and straightforward as possible.. A clean offer is one without conditions. This means securing your financing in advance, thoroughly reviewing the pre-list home inspection, conducting your own home inspection, and addressing any questions before offer night.

In a multiple offer scenario, home sellers are more likely to consider offers that appear straightforward and hassle-free. When you submit a clean offer, you signal to the seller that you’re serious and ready to move forward. This can give you a significant edge over other buyers who may still have outstanding conditions. Submitting a condition free offer in a fast-paced market like Toronto is key.

2) More is more. A large deposit sends a large message

Presenting your offer with a large deposit is a game-changer. While 5% is the minimum sellers typically expect in Toronto, offering more—if you can swing it—increase your deposit amount to make your offer more attractive. A larger deposit shows the seller that you have the financial means to follow through on your offer. It can also create a sense of trust between you and the seller, making them more likely to choose your offer over others.

3) Agree to the seller’s closing terms

Another simple yet effective tactic is to agree to the seller’s preferred closing terms. This flexibility signals to the seller that you’re confident and ready to move forward. You wouldn’t want to lose out on your dream home over a shift in the timeline and being amenable can set you apart from other buyers.

Before you submit an offer, take the time to understand what the seller’s priorities are. Some sellers may need to close quickly due to a job relocation, while others may prefer a longer closing period to accommodate their own transition. By aligning your offer with their needs, you position yourself as the ideal buyer.

For more buyer resources check out: 

• First Time Home Buyer’s Guide
• Climbing The Toronto Property Ladder 101

4) Be competitive. Make them an offer they can’t refuse

Offer a competitive price. The goal is not to overpay, but in a hot sellers market (once again!) there are no deals to be had. Your agent will be able to advise you on an appropriate offer number based on recent sales in the immediate neighbourhood, but for your own peace of mind, its recommended that you research these sales, to make sure you aren’t over paying. Keep in mind that if you bid too low and lose the house, the next house will sell for even more. As homes sell for record prices, every new home on the market now has a benchmark, and will likely surpass it every time.

Although real estate is a fast-paced industry, it’s important to do your due diligence and invest wisely. Read all about making wise real estate investment choices here.

5) Hire the right realtor

Ensuring your agent is making connections with the listing agent. Your real estate agent should be a neighborhood expert and possess superpowers in negotiation, communication, and persistence. Ensure your realtor knows how to build a has a strong rapport with the listing agent before offer day.Are they pleasant to deal with? Ultimately the seller has the final say in what offer is accepted, but the seller’s agent can also colour that decision. Real estate agents are only human, and sometimes if they find the other agents unpleasant to deal with, they might push for a different offer from another buyer. This comes back to our blog about hiring the right realtor for your sale.

Looking for the right person to help you buy a home? Read these posts next:

• Hiring The Right Realtor
• How to Fire Your Realtor when it’s Not Working Out
• Top Secret: Three Traits You Didn’t Know You Needed in a Realtor

6) Understand the offer process

Have a solid strategy. Ensure the agent has a clear understanding of how the offer will be run. Sometimes, a listing agent will send all offers back for a second round, a decision they have made before the offers have even come in. Other times, they may choose the top offer on the first round. There is a fine balance to be found when making your initial offer. Too high and you might over pay, too low and you might be rejected. Finding that middle ground is where an experienced realtor comes in.  Knowing the right amount to offer regardless of a first or second round. These are critical points to understand so you can prepare for offer night.

There’s a lot of technical jargon that comes with buying a home. For example, what does ‘Days on Market’ really mean? Read our blog right here.

7) The right opening bid is key to winning!

Finding the right balance in your initial offer—without going too high or too low—is where an experienced realtor’s insight is invaluable. Knowing the right amount to offer regardless of whether it’s a first or second round can make a significant difference.

While bidding wars in Toronto can be intense and nerve-wracking, being prepared and strategic can set you apart from the competition. By submitting a clean offer, making a strong deposit, being flexible with closing terms, hiring the right realtor, and understanding the offer process, you’ll enhance your chances of securing your dream home.

While the stress may be inevitable, it can be managed with the right approach. So gear up, get your strategy in place, and happy house hunting!

For more content on the different scenarios buyers can face read:

• The Real Estate Debate: Should I Sell Or Buy First?
• Why You Should Take Advantage Of Your Buyer Visits

In the end, if you lose out on the house, dust off and move on to the next one. If one thing can be said for the Toronto real estate market, its that it’s always hot! If you’re ready to make a move, give us a call at 416-909-1602 or email hello@getnested.ca.

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