Preparing yourself for a bidding war in Toronto’s hot real estate market
Mortgage brokers in Toronto are seeing an increasing number of first-time buyers approaching them with concerns over what seems like a guaranteed bidding war when they find the home they want. While it isn’t a guarantee, it’s important to be prepared if the house you’re bidding on receives other offers. Here are tried and true things you can do to help you win (and survive) a bidding war.
1. Find a Toronto mortgage broker you trust and get mortgage pre-approval. To do this, your mortgage broker will work with you to find a lender and then they will review your income, debt, down payment and your credit history to gauge what kind of loan they will offer you. Your pre-approval will come in writing that you can use to prove mortgage pre-approval and should include a guaranteed interest rate that is usually valid for about 90 days. Mortgage pre-approval will help you know the price range you should be looking in and how much you can feasibly offer if you get in a bidding war.
2. When you are getting ready to buy a property in Toronto, mortgage brokers and realtors understand that this is often the largest investment someone will ever make in their life. This is why they will encourage you to do your research. Put the same amount of care into your home inspection as your neighbourhood inspection. Check out the local schools, transportation, crime rates, medical offices and anything else that may affect you and your family.
3. Watch your timing. The weekend is a madhouse when it comes to competition on homes. Talk with your Toronto mortgage broker to better understand the quieter days of the week for viewings so that you can see a house and place a bid before the rush.
4. Before you start bidding, know what you’re getting into. If you have your mortgage pre-approval completed, it can be tempting to jump right in and start throwing out numbers, but know if the property and the area are worth going over the asking price.