How Much Should I Offer?

How Much Should I Offer?
In Toronto’s hot real estate market it can be challenging for a home buyer to offer a winning price for a home. The best bidding strategy must be tempered with what you can afford and the conditions you place on the offer to be accepted by the seller.

Before You Make an Offer

The offer you make isn’t necessarily the offer that will be accepted by the seller, so it’s important that you have your financial ducks in a row and are prepared to negotiate not only on the offering price but the conditions you place on the Agreement of Purchase and Sale that your real estate agent presents.

In order to make the best possible offer, and be ready to negotiate to win, you should:
  • Be pre-approved for your mortgage, don’t let financing be the reason why you don’t get the home
  • Discuss the ground rules with your real estate agent if you end up in a bidding war, this will help to keep the emotional element in check so you don’t overpay or withdraw conditions on your offer that may cause complications down the road
  • Be properly represented by your real estate agent by signing a Buyer Representation Agreement (the reasons why are discussed here)

Deciding How Much to Offer

Do you meet the seller’s asking price? Should you offer above or below asking? What conditions need to be included with your offer? These are the toughest questions that you need to answer as your real estate agent prepares to submit your offer.

The initial dollar amount of your offer is generally dependent upon these attributes:
  • The Comparative Market Analysis (CMA) that will help you decide what the home is worth in comparison to similar homes in the area
  • The condition of the home and future expected renovations or upgrades
  • The high end of your financial “comfort zone” and staying within a budget that you can reasonably afford
  • The expectation of additional buyers submitting offers
Your real estate agent can advise you on each of these things and keep your best interests in the forefront of the negotiations.
During the Negotiations

There are several scenarios that can take place after you have submitted your first offer. Once the seller is presented with your offer they may accept, counter-offer or outright decline your offer for any number of reasons.

How you handle the next steps of the negotiations should be discussed with your real estate agent and each change in your offer, whether it is raising your offer or removing any of the conditions on your offer, should be carefully considered.

In Ontario, the seller’s real estate agent must disclose how many competing written offers have been presented to the seller so you have an idea as to the competition for the property. However, the terms and conditions of the offers are confidential to the seller and their agent.

Competing offers, or bidding wars, are truly a competition and in Toronto it’s not uncommon for a home to sell for several tens of thousands of dollars above asking. Cooler heads don’t always prevail so discuss what outcome you would like with your real estate agent and be certain that it’s always in your best interest to complete the deal.


In any real estate market, hot or cold, buyers or sellers, it’s important that you are informed, prepared and always ready to walk away once your comfort level has been exceeded.

You will find the right home, in the right area and at the right price, and your trusted real estate professional can make it happen.



RECO: Buying a Home

This information is meant as a guide only. Although deemed reliable, information may not be accurate for your specific market or property type. Please consult a REALTOR® professional for more information on making a written offer.