The Toronto condo real estate market is highly competitive and very much a seller’s market right now. If you’re a buyer trying to contend with the rising prices and the aggressive bidding wars, it can sometimes be a struggle to “win” your dream condo.
For years now, the media has been predicting a condo market crash due to an “over-supply” of “empty” units. This has proven to be fiction and a lack of good inventory has caused a recent surge in condo prices in some of Toronto’s most coveted neighbourhoods, including Liberty Village. Condos typically are subject to multiple offer bidding wars and if you don’t know how to navigate these, you can lose big. It doesn’t matter if it’s a loft or a pricey family-sized condo, they are generating multiple offers and it’s not entirely unusual to see a condo space go for $20,000 or $50,000 above its listing price. There are 6 things to remember when engaging in a condo bidding war in Toronto. Adhering to these can assist you in how to win a condo bidding war in Toronto.
Get pre-approved and research the neighborhood
There are many things you can do beforehand to help speed up the process for you in terms of putting in a bid. Getting pre-approved on your mortgage as well as researching neighborhood, building values and trends can assist in what would be an aggressive, fair offer price.
Don’t bid unless you can afford to
Bidding wars are designed to drive up the final sales price and are therefore in favor of the seller. It’s best to not offer anything lower than the asking price and to even offer something above it. If the property is hot and it has more than three bidders, under bidding will see you lose the condo. Make sure your bid establishes that you are serious about purchasing. Don’t go over your budget but at the same time, think of it from the perspective of the seller and be sure to offer something attractive to them.
Hire a condo real estate specialist
Trying to do this on your own is going to leave yourself competing with others who do have agents and who do have these advantages. Get a condo real estate agent who knows the market inside and out, get that edge, and pursue the true market value of the unit without having to look at the price tag.
Don’t be afraid to add in an extra $$$ if you need to (and can afford it)
If it’s a condo you really want and you are competing with other buyers, don’t hesitate to add in an extra $10,000 (or more) onto your offer price. If this is going to break you financially with your monthly payments, don’t do it. If you can manage it though, definitely do. Buyers lose bidding wars all the time by only a few thousand dollars. If you lay down a jump like this, it could make a significant impression and help you get a unit that you might otherwise have to wait another six months to find anything comparable. And waiting 6 months could mean paying even more.
Don’t get caught up in a bidding war
Don’t spend stupid money. If you’re bidding on a condo that is not rare or in a building where your bid is overshooting by a massive margin, you might need to slow down. Is it worth it – it might not be. Don’t overpay on a unit in a building where a similar listing could become available a couple months down the line.
If you feel like you’re losing a bidding war, don’t get caught up in the emotion and always remain respectful. In the past, sellers have avoided choosing the top bid just because of liking another buyer. Though you don’t want to lose a property by a few thousand bucks, you also don’t want to lose it for behaving badly.
How to win a condo bidding war in Toronto is to follow these rules and to remember to adhere to your financial limits. It is a seller’s market right now but if you work it right, you could come away from an aggressive bidding war with the winning prize.