The good news is that you found the perfect house. The bad news is that you're not the only one. If you have been paying attention to the local real estate market, there is no doubt you have heard stories about listings that have sold for well over asking price with some serious competition. Multiple offers have become a common occurrence in the Toronto market and are something that I am accustomed to dealing with.
Sometimes a dozen or more eager buyers have come to the table. In many cases, the home was intentionally priced well below market value to create a rush of offers. From a seller’s perspective, they may have considered this to be the best strategy to obtain the highest possible sale price on their property. However, as a buyer, it’s very important to know where you stand when you find yourself in a multiple offer situation.
Determining how high you are willing to go comes down to your own long-term real estate plans and risk tolerance. An overly aggressive offer may not be the best idea if you are only planning on living in the home for a few years. However, if the home you are bidding for is going to suit your long-term needs, a strong offer will get you into the home you love, and the appreciation over time will mitigate the risks of a market fluctuation.
For many older homes, your investment isn't limited to just the purchase itself - the home may require additional renovations to suit your personal tastes. Consider the additional funds you want to set aside for upgrades, and keep that in mind when deciding how much you are willing to spend. If a property is already selling for over market value, and further investment is required to upgrade the important elements of the home, this may not be the property that you want to fight for.
As an experienced Realtor in Toronto and the surrounding area, I help my clients make the right decisions under pressure. There are many factors to consider in a multiple offer situation, both personal and market-driven, to make the right moves with your money. Although it feels great to win, it is even more important to feel good about your offer when the negotiations have wrapped up. Working with an experienced professional on your side will allow you to feel confident that you made a wise investment that is aligned with your real estate goals.