For the past year, the real estate market has been quite active in the Greater Montreal area. There has been a noticeable drop in the number of properties for sale, shorter selling times and rising prices. In this context, competition is present; it has become common for sellers to receive several promises to purchase. In real estate terminology, we are in what is called a “seller’s market”, as the situation is in their favour.
Are you looking to purchase a home in the near future? Get ready! Our advice will help you set up a successful strategy and put all the chances on your side.
Why this phenomenon of overbidding?
If the property you are interested in is receiving so many promises to purchase, it is because it is listed at the right price, matches the characteristics sought by many other buyers and is located in a popular neighbourhood.
Why are there so many buyers in Montreal today? Simply because the economic situation is favourable to investment.
Properties are selling well above the asking price, multiple promises to purchase are no longer rare situations, and there are tips to avoid missing an opportunity.
Advice 1: Obtain a mortgage pre-approval
Having a mortgage pre-approval will allow you to have a better idea and to set realistic expectations for the real estate market. In addition, it demonstrates your commitment to becoming a homeowner and thus, gives the seller confidence. The ideal is to make an appointment with a mortgage consultant before you even start visiting properties.
Advice 2: Surround yourself with the right people
If you want your efforts to be successful, it is essential that the person who will represent you as a real estate broker is someone with local knowledge and experience. Partnering can help get buyers’ attention quickly when they’re looking for something specific, but make sure there’s plenty of other work to be done! A good rule of thumb: It’s crucial to sign up for a real estate alert so that you’re quickly notified if a property matching your criteria comes on the market.
Advice 3: Be the ideal buyer
The power of emotions should not be underestimated! Promises should not be taken lightly. To make your purchase stand out, add a cover letter to show how much you care and include personal stories about why this property captured your heart or what made one fall in love with their life goals – even if they are just dreams on paper at this point. Include photos of family members who share those same dreams…By playing the charm card, you create a sense of belonging and a connection with the seller, who will potentially see you as the ideal buyer. This is not a new approach, but it has been proven to work!
Advice 4: Timing is everything
It is often said that timing is everything. If your offer is in competition with other buyers, take some time before making an immediate decision and discuss with your real estate broker what strategy to take. Your real estate broker may suggest that you wait until it’s over so that other buyers can come forward and make offers on their own terms!
Advice 5: Offer the right price
When writing your proposal, think about how much you are willing and able to offer. It can be the amount on your mortgage pre-approval or simply a reasonable contingency; whatever works best for each situation! This way, if your promise to purchase is not accepted by the seller, you will have no regrets, because you will have offered your best.
Don’t lose hope! As we mentioned in our real estate forecast of our economic capsule, prices might be slowing down. In a situation of multiple promises to purchase, patience is key. The point here is not to simply wait for someone else’s offer, but rather to work with your real estate broker on the best way to approach each case individually so that, no matter what, there are available options.
You made a promise to buy, but it was not accepted? It is possible to make a “second rank” promise to buy. If the conditions related to the first selected buyers are not met (refusal of financing, withdrawal of the offer following the building inspection), you will have a second chance to become a homeowner. Please note that during this period, you will not be able to make a promise to purchase for another property.
If you have any questions about real estate, do not hesitate to contact us!