Winning a bidding war against 42 other offers!

 I just represented a buyer in a multiple offer situation (also known as a “bidding war”) Happens all the time in Toronto, right?  What was different in this case was that there were 42 other offers along with ours!  So how did we end up winning the property, and, more importantly NOT overpaying?  Here’s what we did…..

Understand what a multiple offer situation is (and isn’t). Simply put, it’s one of several marketing strategies sellers use to sell homes.  Here’s how they generally work:

As a Realtor, there are many approaches to marketing a listing.  One strategy is to underprice the home in hopes of attracting as many buyers as possible.  Generally speaking the home is underpriced 10-15% below market value & offered for viewings for 7-10 days.  Offers are reviewed at a specific date & time which is indicated on the listing.   The seller hopes at the offer review time that the home sells with no conditions to the highest bidder.   In some cases ‘bidding frenzy’ may drive prices slightly over market value.

In this case the Sellers priced the listing super aggressively at about 30% less than market value.  A good Realtor can easily check market value by reviewing recently sold similar properties to make sure you're not overpaying.  

As a buyer, how do you compete in these situations?

  1. Communication with the listing agent.  A good realtor will open communication to get the best information to provide to a buyer to create a winning bidding strategy.  This way the listing agent understands you are professional, thorough and working in the best interest of your client to make this as easy as possible for thier seller to accept your buyers offer!  Information you can gather:
    • Preferred closing date
    • Target price (if they will share) or a recent sale they are targeting (again, if they will share)
    • Do they want best and final offer or will they expect multiple rounds of bidding?
    • Is there a home inspection to review ahead of time?
    • Do they require a deposit draft at the time of offer?
    • Do they have a cut off time to review offers; after which they won’t accept any?
    • How many offers do they anticipate?
    • Will they accept a pre-emptive offer? (more about that below....)
  2. Decide your offer strategy ahead of offer time so you’re not pressured during the bidding. 
  3. Prepare and be comfortable with offers at A,B,C levels should you need to; have these at hand so you're not scrambling to do paperwork at the last minute.
  4. Ask the agent for written instructions, and follow them!  If they can’t provide written instructions this means offers night may not be organized & at least you’ll be prepared for that, too!
  5. Review recent sales so you understand market value for the property.
  6. If there is no home inspection provided by the seller, do your own ahead of time. 
  7. Review seller provided home inspection
  8. Send the listing to your mortgage broker to review to see if you can waive any finance condition
  9. Write a personal cover letter to submit with the offer to stand out from other buyers; or better yet do a video
  10. Get a deposit (bank draft) ready to submit with the offer
  11. Ask yourself “If I found out the house sold for $XXX.XX would I be OK with that?”  You just hit your price ceiling, where you can walk away without regret or emotion.

Develop a bidding strategy:

In the case of this home, we were fortunate that the listing agent had clear and concise directions, which we followed.  After the fact there were several offers higher than ours, but with conditions --that made our offer more appealing.  In our case we had decided our bidding strategy would be:

To offer a large deposit and have it available offer night

To go in with our highest and best offer

The house may sell for higher than market value because of the number of offers (it did not)

To rely on the owner-provided home inspection

The mortgage broker cleared an offer without finance conditions

To follow the rules set down by the listing agent

What happens if you can’t offer without a condition of finance (or inspection)?

Understand that to get a seller to accept a finance condition in an offer, you will likely need to offer a premium price.  Make sure you don’t offer what the property will appraise for; or you will have to come up with the balance in cash.

Do houses sell before the offer date?

Yes they can if a seller is willing to look at a pre-emptive offer.  This is also called a ‘bully offer’.   This may be discretionary and is usually (but not always) included in the listing details.  Bully offers are typically at the top of the price range a seller is anticipating with no conditions.  

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A disturbing trend I've come across recently is the fraud in the rental space.   As an agent who handles a fair share of rentals; these issues have shown up over several ways this year.   I'll tell you about 3 instances I've had and the red flags that appeared with each! 

When I'm representing a landlord and an application comes in, I spend a lot of time going through an applicants documentation and getting references and looking through their background.  Here's what I do:

  • Call their employer by finding the employer's website and calling through their office to confirm employment.  I don't just call the supervisor on the application
  • Look carefully at the documents to see if they are real; company letterhead & credit reports can be faked or bought
  • Check social media & linked in
  • Call past landlords
  • Make sure there is a building at the address they're currently renting
  • Check that the landlords name and property owners names match.   If it's an apartment building call through the property management company if it's an apartment rather than calling the number provided.
  • Look at the credit report for signs of altering

With those things in mind, let's look at 3 things that have happened to me this year!

1.  Student rental Scam - fake rental and landlord

First of all, you should never have to pay to submit a rental application, or be asked for a deposit before you get a chance to see the place.   These scams are generally ads on sites like Kijijii and Facebook for rentals that look too good to be true.  They also steal MLS listings for homes and advertise them at lower rates.  I came across one recently through a family friend desperate for some student housing.  It was a big scam; and when I called them out they 'protested too much'.    Here's how to spot these scammers:

  • They demand payment to submit a rental application
  • They demand a deposit before you see the unit
  • Makes excuses why they are not available to speak to on the phone 
  • Will only communicate through messenger, text or email
  • The advertised price is way lower than other rentals
  • Their Facebook profile was just created
  • Their Facebook name does not match their user name ID (see the URL) 

2. Fake Rental Applications   

There are some very good forged documents out there.  I had some people submit an application on a lease I was advertising and here's what I found during the checks, among the other checks I did as above :

  • Inconsistencies in addresses on the application
  • Employment letter does not look real - no header or footer with information on the company letterhead

3. Forged Tenacy Papers

I had a call from a gal who had a great story, good employment, good credit, moving to Toronto from outside the city for work, can't come in to look for a place so needed virtual showings.  Could I help her find a place.  Sounds great right?  

Now I don't usually check tenants out before I help them (and I'd helped out a client with an out of town move this year already in a similar situation)  But with everything going on right now, I felt it couldn't hurt to see what her references would say.   So she sent in her application & 

then came the paperwork - the address of her job didn't match up with her story.  The company had never heard of her or her supervisor.  There was even no property listed at the home she had put for her address!  Other red flags for scammers include what she did:

  • get overly upset when called out 
  • provide complicated excuses for 'mistakes' on application forms
  • call the fact checker a liar, unprofessional, etc.

So be careful out there folks! 


A big thank you to the communities of Guildwood, West Rouge & Port Union for the terrific support last Saturday for my Community Shredding Event.  About 30 families participated - and their generous food donations filled our Jeep to the brim!   The food donations were taken straight to Feed Scarborough - the Scarborough Food Security initiative and will be distributed to local satellite food banks in the area.   Judging from the huge line up outside the Manse Rd. food bank Saturday, it's much needed. 

Chartwell Guildwood was my partner for this event and provided the venue and great snacks.  Thank you Kelly & Dianne for your wonderful support.  As always, Papersavers was gracious, friendly, professional and helpful!  

One interesting sideline - My husband, myself, Dianne and Alex from papersavers all grew up within the same area!   Such a big city/small world!