Scott McGillivray’s rules for surviving a bidding war
1. Know your limits. Remember your mortgage preapproval is the maximum of what a bank is willing to loan you, but it doesn’t mean this should be your target price to reach. Look at how your mortgage payments fit into your monthly budget and use that as your guide.
2. It’s not a competition. If you pay too much for a property, you end up losing in the long run.
3. Listen to your gut, not your agent. Your real estate agent is on your side, but it’s still their job to sell you a property. If you aren’t 100% behind the deal, don’t sign.
4. Submit a letter with your offer. Explain why you like the property so much. This could set you apart from offers that are much higher. The seller is also emotionally attached to the property and may feel more comfortable selling to someone who will preserve the same features they loved for so long.
5. Be prepared.
With everything, from financing to home inspections. If you find yourself in a bidding war, you need to be able to move quickly, or else the seller may lose confidence in your offer. At the same time, be prepared to walk away if you feel pressure to pay more than what you think a property is worth.