Hey there Savvy Home Buyers and Sellers this is Jeff O’Leary – “The Village Guru” – Mississauga Real Estate Broker and in today’s episode I’m going to go over “4 Steps on How to Win a Bidding War!” Not just win it, but actually the house for the price that you want not over pay and feel happy at the end of the day. If you’re buying a house anytime soon, you’re not going to want to miss this video so without any further ado, let’s get right into it! I’ve got to admit, I’ve been wanting to do this video for a long time now… because nowhere out there is anybody talking with any sense of logic about how to navigate a market where prices are continuously going up where there’s not enough supply and a lot of people are trying to buy the same house. So today I wanted to sit down and give you 4 tips based on what I do with my clients in order to get them that house and hopefully it’s going to help you in your process because I want I want to see you be happy at the end of the day. So tip #1: You need to forget about the listing price. In a market where houses are selling for over asking price a lot of times the price is not market value it’s actually priced below in order to get more interest which in turn generates multiple offers because people try anyway. What I hate seeing is when we have someone who’s set up and they can afford a great house, it comes on the market and the all of a sudden the house in that “bijillion” dollar neighbourhood down the road where the agent listed it for 50% of market value it pulls them off their track, so they run over to that house when a seasoned agent knows you’re not going to get that… that’s not going to sell for what it is (asking) so I don’t want to see you get distracted so it’s really important, forget about price and always work on value. Tip #2 You need to learn to do things in reverse of what everybody else is doing. In this market, 95% of people are your typical consumer and they’re trained to do things a certain way… that means they 1. They want to fall in love with the house 2. They try and negotiate the price based off of emotion and what everybody else is saying and a lot of times that can either lead them to never get a house or lead them to overpay for the house and then finally the last step is they figure out the details after… Go back to their bank, hopefully they get approved hopefully the house is in good condition and basically it just… causes not a fun situation all the way around. But unfortunately, that’s what 95% of people out there are doing because they don’t know better and they’re not being guided properly. If you change the way you look at things, your results are going to be different. which leads me to how 5% of the population of buyers does it and that is they think like investors, so 1. They figure out the details before they start searching that means understanding what they can afford and then narrowing down the neighbourhoods that have the homes that they’re looking for, in their price range based off of hard data which means recent sales. That also means if there’s not been a lot of homes that have sold in the area that means adjusting the past sales in order to bring them up to today’s standard. It actually is a little bit of homework but being able to narrow down your search ahead fo time will pinpoint you into finding the right house. Then next, they actually negotiate the offer and again, we’re not negotiating based off of emotion we’re negotiating based off of all the information we know in step #1. Which means, yes, you may win that bidding war and pay the most But I’m going to guarantee it’s going to be based off of hard numbers which means there’s not going to be some ridiculous number coming out of nowhere that was based on a “well what’s the most comfortable you feel like paying for this house” Guys, if anybody said that to me as a buyer I would just loose my stuff… or I hate things like “Houses around here sell for 80k over asking” Asking price means nothing, they (houses) actually sell for market value it’s just when people start talking like that, they don’t really know what market value is because they’re not doing the work to determine it and then finally… they love it. So after they figure out what they want after they negotiated the price and feel good about it then they can turn around and love their house… So that’s the difference in the process. So step #3 So it’s actually determining what fair market value is for the home and then determining based on the factors such as how upgraded the home is… how much interest there is and coming up with a reasonable offer that gives you a chance to win. Now we do this a number of ways, so it’s not just by looking at comparable sales (on MLS) because you can’t always tell if that house is exactly the same or what’s going on so it’s really based off a number of things 1. It’s based off of square footage assessments… tax assessments it’s combining those, taking out the pictures and the emotion and looking at the raw numbers and then coming up with an average of what’s going on. Then you need to determine, ok, on the low end of the range these houses are selling for ‘X’ amount… and then on the high range they’re selling for that amount and then when you look at that house (the one you want to buy) you can use your logic to determine ok, this house kind of falls in the high end of the range or it needs a lot of work, it falls in the low end of the range. You see, by doing this based off of past sales prices and hard data I’m not even looking at the asking price because again, asking price means very little in a market where asking price is used as an advertising ploy to get people into the home. When you know how to negotiate properly and determine price, it’s going to help you a long way. And step #4: Be prepared to come in with your strongest offer and again, if we go back to following the process like an investor you will be ready. So that means when you come in with your offer you know your facts you’re coming in with a strong offer you’re not “testing the market” by throwing out prices because if you’re in competition, you’re going to get eliminated pretty quickly. You’re also not putting unnecessary conditions in the offer. Now, let me be strait I don’t recommend anybody waive conditions that they shouldn’t but at the same time if you understand where you’re at you understand the condition of the home, you understand… maybe you did a pre-inspection you understand your financing, you understand the values you should be in a position to make a strong offer because in hot areas like Toronto and hot areas all over the GTA, I’m telling you, a lot of these offers are coming in firm. but the only way to truly do it is to do the homework ahead of time, so you can feel comfortable doing it. Well there you have it, I’m Jeff O’Leary I gave you a lot of information very quickly on how to win a bidding war and how to navigate markets like this. Listen, if you have any questions about real estate always feel free to call or email me I’m Jeff O’Leary. “The Village Guru” If you like this video give it a thumbs up subscribe to my channel and share it with your friends! Have yourself a great day!