Real estate overbidding: how much should a buyer offer for a property?
Real estate overbid
Real estate overbidding is a current phenomenon taking place in Montreal as well as in its neighboring regions. This phenomenon involves a decrease in the number of properties for sale, an increased competition between buyers in order to have the best promise to purchase and the prices of properties going up.
This overbidding is beneficial for sellers, who are spoiled for choice when they receive numerous promises to purchase their property. However, for buyers, this overbidding leads to fierceness and disappointment. Multiple offers are pouring in, so how do you stand out? How much does a buyer have to offer to get a property in this unpredictable market? What should they do? Here are a few tips to help you.
1. Be accompanied by a real estate broker expert in the area
In this complex and ever-changing market, it is recommended that you be accompanied by a real estate broker that is an expert in the area in question, as he or she knows the market well. He or she will advise you on the perfect balance between an aggressive price, the market value of the property, the current situation and your budget.
Market value of the property
When you work with a broker, he or she is familiar with the various neighbourhoods in the area you are looking for. With his knowledge of the prices of neighbouring properties, he will be able to establish the true value of the property you want. Your broker will then be able to offer you the most attractive price for the seller.
Given the current situation of real estate overbidding, many offers are made on the same property. A seasoned broker with experience in dealing with multiple offers to purchase and negotiating will be able to guide you in establishing a strategy to distinguish yourself from the competition, while respecting your budget.
This remains the most important element when buying a property. Unfortunately, emotions can sometimes override reason. It is therefore necessary that you establish the maximum amount you are willing to invest in order to acquire the property of your dreams. Having a good knowledge of the prices of properties on the market, your real estate broker will propose properties that respect your budget.
2. Be organized
Organization is a key component to distinguishing yourself from competing offers in the marketplace. Mortgage pre-approval is an effective tactic to show that you are a serious buyer. This pre-approved mortgage application is to be attached to the promise to purchase.
Letter of introduction
On the more sentimental side, it is recommended that you write a letter of introduction and attach it to the promise to purchase. In this letter, you can describe your family portrait, the reasons why you want to buy the property and the emotions you felt when you visited the place. This human aspect could then touch the seller and weigh in the balance in your favour.
3. Be patient
With the increased competition of buyers on the market, patience is required to find the property you want. You must remain hopeful and rely on your real estate broker to review or modify your strategy if it is not effective.
By following these few tips and working on your patience, you could stand out from the competition and acquire the property of your dreams. And now… breathe!