Know your limit and stick to it. That is the stark warning from a leading bank as they say more Canadians are fighting it out in bidding wars to secure prime properties.
"The competition for real estate in Canada, particularly in hotter markets, can be fierce, however it's important that buyers avoid getting caught up in the moment and respect the budget parameters they've established," said Laura Parsons, Mortgage Expert, BMO Bank of Montreal.
According to the bank, 34 per cent of Canadians are willing to enter a bidding war, an increase of six points compared to one year ago. With limited stock of single-family homes in urban cities, this scenario is naturally more prevalent in Toronto and Vancouver.
Homeowners say they visit an average of 9.5 homes before buying, while half of the survey respondents say they were successful on their first bid. Provincially, prospective buyers in the Prairies and British Columbia are the most willing to compete on the price of a home.
"For those willing to negotiate on the price of a home, the most important part of preparing is ensuring they get pre-approved by their bank so they know exactly what their limits are and can stick within them,” advises Parsons.
Many buyers say they believe bidding wars are triggered by sellers who deliberately price their homes below market, with those on the Prairies and in Toronto the most likely to use this selling strategy.
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