on Yahoo!The couple's situation was not unique: in hot real-estate markets- such as Toronto and Vancouver- bidding wars are all too common. The trick to winning one, says Helga Teitsson, a Toronto-based associate broker, is an unconditional offer. Sellers can get stressed when they see an offer riddled with conditions- they worry that if the conditions aren't met, the deal will fall apart. So they're often more receptive to unconditional offers that are firm and binding.
In most of the cases, Lyndsey and Tracy were outbid by $30,000 or more, putting the prices of the houses way out of their range. And that's what they expected to happen when they viewed a great house on a decent-size lot with- a bonus- two bathrooms. The couple decided to bid, but it was a little half-hearted. "We honestly believed there would be so much competition that there'd be no way we could afford it," says Lyndsey.
But Lyndsey and Tracy were pros by this time- their fourth house- so they knew all about submitting a clean offer. They had their financing already in place, made no demands as to when they could take possession and- an extra point on their side- submitted a certified cheque as a deposit(the larger the sum, the better, advises Teitsson). The one thing Lyndsey and Tracy did not do was a pre-offer home inspection- instead, they made their offer conditional on the completion of a future inspection. "We just thought there was no way we'd get the house, and we did not want to waste money on a pre-offer inspection," says Lyndsey.
On the evening that the seller was accepting bids, Lyndsey and Tracy stayed home, convinced their bid would be laughably insufficient. They were surprised when their real estate agent called a couple of hours into the evening. "She said, 'They want everyone to do better,'" says Lyndsey. "We'd never heard that before." So they upped their bid and waited. "I was excited," she says. An hour later their realtor called again, this time with bad news: "She told us we didn't get it. And a day later she told us we'd only lost by $2,500. We realized that if we'd had no conditions, specifically the home inspection, we could have had another shot and maybe won the house," she says. "Sellers prefer going with a sure bet."
Cut the conditions If you live in a hot real estate market, make your offer as condition-free as possible(go with a pre-offer home inspection). One condition Teitsson often includes, though, is that the seller provide a warranty that all heating, cooling equipment and appliances are in good working order.
Don't make any demands about the closing date. A seller will be less likely to accept your offer if you want to move in sooner than he wants to move out.
Lesson #4 Know who your lawyer is
Three years ago, Adam* decided to refinance his mortgage to take advantage of lower interest rates. He filled out the forms, got approved and didn't think about it again. But when he got a call from his bank a few days later telling him the legal paperwork associated with the purchase of his house in Toronto was botched, he was shocked. Not only did he not have clear title on the house- which means the property wasn't completely free of claims and he didn't own it legally- but it was registered to a dead man and the legal description of the property was wrong.
The bank wouldn't process his newly financed mortgage until he'd sorted out the legal mess. So Adam tried to reach the lawyer- recommended by a friend- who'd handled the transaction. But days later, after several calls, Adam wasn't able to contact him. Frustrated, he got on the phone with the group that oversees Ontario's lawyers and found out his lawyer was under suspension, and not for the first time.
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