Buying a Vancouver home: 5 tips if you end up in a bidding war
Buying a home: 5 tips if you end up in a bidding war
There are a few things you can do to try to lessen the stress of buying when you’re not the only one who thinks they’ve found their dream home.
PHOTO BY NICK PROCAYLO /PNG
You’ve finally found the home of your dreams. So have 15 other people.
5 tips if you’re in a bidding war
Competing offers are the buyer’s bane in a market where demand far outstrips supply. The Lower Mainland has had more than its fair share of bidding wars as emotions run high and home-hungry buyers get caught up in the thrill of the hunt. As they say, it’s a jungle out there.
That’s why in Vancouver’s housing market it’s important to keep your cool. There are a few things you can do to try to lessen the stress of buying when you’re not the only one who thinks they’ve found their dream home. Local realtor Amy Trebelco provided us with some tips on surviving the Greater Vancouver bidding wars.
1. Work with a realtor who knows the area
Any realtor worth their license will provide their client with a market analysis for the property. But it also helps to work with someone who knows the area beyond what they see on feature sheets. That way they can provide an assessment of what a property is worth in terms of the real world, rather than what’s on paper.
“Neighbourhoods and locations have different nuances,” says Trebelco, a realtor with the Mary Cleaver Group. “An agent who is an expert in the area is aware of the activity levels of the market and has likely seen or been in many of the recent comparable units or buildings, which helps to really understand the market value of a property. They may also be able to say, ‘Oh that building has a big project coming up, that’s why it’s priced this way’ or ‘That unit got a premium because it’s really well maintained and fiscally responsible.’”
2. Know thy self
A buyer might have a reason for wanting a property that goes beyond the range that the agent recommends.
“Maybe your best friend lives across the street or you grew up in this neighbourhood or this is your absolute dream home and you’re going to live there for the next 35 years,” she says. “Then the value to you as a buyer could be a little bit higher than what my range of market value is. It’s the balance between those two things. As long as the buyer is educated regarding both values, then they make the ultimate decision about the price.”
3. Be prepared
In the Lower Mainland, the seller signs a Direction Regarding Presentation of Offers (DRPO). The document says that the seller is not going to look at any offers until a certain time.
“Then you know when your offer is due and you have until that time to do your due diligence,” Trebelco says.
1. Checking in with your mortgage broker to ensure that they have the documents they need.
2. Reviewing property documents, including strata documents.
3. Doing a pre-inspection.
4. Ensuring your deposit funds are readily available.
“Traditionally you would do all of this after you’ve secured the property. In the case of multiple offers, you try to do all of this ahead of time so you come in as clean as you can.”
David Fairbairn, of Fairbairn Home Inspectors, recommends a pre-purchase inspection. “It’s a great deal. It’s cheap insurance. You spend $500 and you could save thousands. We’re seeing the inspections pre-purchase are going by the wayside right now and it’s very unfortunate.
“A good deal of my business is going to properties after the buyer has already taken possession. Unfortunately, in many of these cases, we’re finding the buyer has purchased a home with a hidden issue. That’s a very unpleasant surprise especially after you’ve got your keys and moved your furniture in and discover there’s a foundation leak.”
Occasionally Trebelco will tell a client that they can skip the inspection, which can happen sometimes on strata properties, “if the building has well-documented maintenance histories, the depreciation report is recent, or we may be familiar with the building. We sell a lot in Mount Pleasant and the East Side, so we have clients who have bought in various properties. So, if you have the documentation and knowledge about the building, you may choose — depending on your own risk tolerance — to go ahead with or skip an inspection.”
4. Be available
This applies to both buyer and agent. “If we get the phone call where the buyer is in the top two or three and you want to revise the offer, if you’ve gone out for a dinner or a movie you may miss your opportunity. You have to block off that time and sit by the phone in anticipation of what might happen.”
That’s what Trebelco does. “Monday and Tuesday nights, I sit at home. I’m never more than 10 feet away from my phone and computer.”
5. Know your budget and stick to it
“Bidding wars can be emotional,” Trebelco says, “especially if you have lost a few properties.” A buyer might be ready to up their offer by an unrealistic amount. Trebelco said that’s when it’s their job to be the calm in the storm, and to say, ‘the broker approved you for a certain amount, we talked about the value and it was this.’
“We can help balance the emotions,” Trebelco said.
Trebelco has seen enough homes slip away from dreamers to become philosophical about missed opportunities.
“It’s hard to take the emotion out of multiple offers when you fall in love with a home and envision living there. At the end of the day there will be another one. Once you get one or two under your belt it becomes a little easier to ride the wave. I’m a firm believer that you get the property that you’re meant to get to make it a home.”
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