As I write this, Edmonton real estate prices have reached record levels. It is a sellers market, in other words, no fun for the buyer. Bidding wars have been reported. In case that needs an explanation, a bidding war starts when a buyer offers more than the listed price in the hopes that the seller accepts their offer, the agent continues to accept offers, the seller waits for a period of time before choosing which offer to accept. Buyers aren’t told how much the other bids are, so it becomes a guessing game.
Besides offering a higher price, another tactic used for winning the bidding war is to waive all the conditions, the buyer releases the ‘subject to finance’, ‘subject to sale of present home’, ‘subject to satisfactory home inspection’, etc., as conditions of sale, in other words, the winning bidder can’t back out once the offer has been accepted.
To waive inspection is a bad idea, not just because a home inspector is writing this post for you. A good home inspector will take between two and three hours to examine a house, using tools that I am sure are not sitting in the trunk of your car. Even if you think you can do it yourself, I bet you will not be spending 3 hours examining a house for potential defects during a walk through with an agent, while you are still deciding whether this house is the one you want. By all means waive conditions such as subject to finance if you are pre-approved for the amount you intend to bid, definitely lose the subject to sale condition, after all it’s a sellers market out there! But keep the inspection.
A great way to win the bidding war is to wait it out. This is Edmonton, not Vancouver or Toronto. An Edmonton bidding war is more like the North and South Koreans exchanging a few shots over the 38th parallel, it doesn’t last very long, prices do go up a bit, resulting in the people who have been thinking about selling their homes hurrying them on to the market, hoping to cash in so they can move to Arizona or the Sunshine Coast. Soon there are plenty of properties to choose from. A cease fire results after the ammunition runs out, and prices fall back down somewhat.