If you’re planning to purchase a house or condo in Ottawa in the coming months or later in 2022, you’ve probably heard stories about bidding wars in our competitive market.
Some properties, especially those in hot neighbourhoods and within particular price ranges, are receiving multiple offers, and buyers have to strategize in order to offer the best offer possible in order to secure a property.
Ottawa’s resale housing inventory has been lower than usual for more than a year. With limited properties available and a lot of buyers looking, a simple reality is that the house or condo you love could attract other buyers who also plan to put in an offer.
While these situations are commonly called “bidding wars,” that term that can make the process seem scarier than it actually is.
I’ve heard stories of some discouraged buyers who have decided to step out of the market after bidding on several properties and not getting any of them. They are hoping to wait for the market to become more balanced, with more properties for sale.
The problem is that even when we see more properties for sale in the spring, for example, which is typical even in a year of low inventory, there will still be a lot of competition among buyers due to the pent-up demand.
If you are buying in the current Ottawa market, it helps to be realistic and aware of some basic facts.
It means accepting that it might take you longer to successfully buy a property than it would in a more balanced market. In the current market, you will possibly have to put offers in on several properties before you’re successful.
It means trying to not get too emotionally attached to any specific property, and to remember if your bid isn’t successful, another property will come along that you might like even more.
For first-time buyers particularly, this market can seem intimidating. But with more than 30 years of experience helping clients through a wide range of market conditions, I offer expertise and negotiating skills that can help you feel prepared to take on that challenge.
I will ensure you fully understand the market, what you can expect to get with the budget you have and will give you pointers on how to stay calm and cool if you find yourself competing for a property.
Here are a few key points to keep in mind:
Not all Ottawa Properties are Attracting Multiple Offers
For starters, don’t assume you will face competition with every property you like.
In my experience over the past year, multiple offers tended to be properties in certain price ranges and neighbourhoods. It can depend on the neighbourhood and the asking price.
For example, in suburban areas last year, properties in the $500,000 range were regularly attracting multiple offers, but when you looked at properties in the $700,000 range in those same areas, multiple offers were much less common.
The Condo Market is Easier
Ottawa’s condominium market has definitely been softer than for houses, with more product available. Buyers looking for condo units have been less likely to find themselves facing competitive offers.
Information You’ll Receive when there are Multiple Offers
If you like a property and want to put in an offer, the buyer’s Realtor is required to share some information with all buyers. This information includes how many buyers are offering and if any of those buyers are also represented by the seller’s Realtor. I can help explain how you might use that information in considering the offer you make.
Once the offers are submitted, the seller will consider which ones are most appealing. It’s possible they will ask a few buyers if they are able to improve those offers.
Stick to Your Budget
It’s essential in Ottawa’s current market that you be pre-approved by your lender, and you know how much you can offer.
When we meet to discuss what’s on the market, I will give you a good idea of neighbourhoods and price ranges that are best suited to your budget.
You might see a listing price that seems within your budget, for example, but I can let you know the range a seller will actually expect to receive. There is no point bidding on a property that we know will sell for a price that is well beyond your budget.
Using recent sales records for similar properties, I will provide you with the prices that have been accepted, which will give you an idea of what to bid. This is known as the property’s current “market value.”
If you offer a price far above that value, you could be in for financial headaches if your lender asks for an appraisal and determines that the price you offered is too high. The lender may decide to lend you only what an independent appraisal has concluded the property would sell for in the current market, and you could be left trying to make up the difference.
The Highest Price Doesn’t Always Win
First-time buyers are sometimes surprised to learn that a seller does not always choose the highest bid, and is not required to do so. A seller might choose to accept an offer with a more flexible closing date, or an offer that is lower but has fewer conditions and…in this market most offers have no conditions at all.
If you can be flexible with a closing date, that can work in your favour if someone with a higher bid wants a closing date that does not work for the seller.
In a competitive market, it’s particularly important to have an experienced Realtor on your side.
With more than 30 years of experience helping clients buy in Ottawa, I have extensive negotiating experience, and I can help you be fully prepared for the home-buying process.
I can also give you clear idea from the beginning of what kind of property and which neighbourhoods are the best matches for your budget.
Remember that having a Realtor working on your behalf comes at no cost to the buyer. The fees for the buyer’s Realtor are paid through lawyers for the seller’s Realtor.
If you’re interested in buying or selling property in Ottawa, I’d be happy to chat with you about the current market.
You can read more about me on my site, www.nancybenson.com, where you can also read testimonials from clients. I’ve always been gratified when clients tell me I helped make them feel confident, informed and fully prepared as they searched for the property of their dreams.
Feel free to give me a call, at 613-747-4747.