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April 19, 2021

Would you enter a bidding war for a house?

Earlier this week, we detailed one of the more awful stories in real estate bidding.

Stock-photo-14493357-house-with-quot-for-sale-quot-sign-isolated-w-clipping-pathIn Toronto last month, a modest bungalow was listed for $759,000. Forget for a moment that any modest bungalow for three-quarters of a mil is preposterous on its own, but it nonetheless attracted its share of suitors, who placed bets that their offer would be high enough.

And then, a mystery Chinese buyer swooped in, dumped $1.18 million on the house, and snatched it away. Well, then!

Of course, this is a pretty brutal, uncommon tale of home shopping, but is it perhaps just the latest sign that bidding wars are fun for no one? A new survey suggests Canadians think the latter.

According to a poll conducted for BMO Bank of Montreal, only one-quarter of prospective home buyers would engage in a bidding war, meaning 75 per cent of Canadians would rather simply walk away.

*Bing: How to negotiate your home’s closing price

Half of those willing to enter a bidding war said they’d pay as much as 10 per cent above the list price. A tiny chunk went further, saying they’d pay as much as 20 per cent above the going rate. (For your curiosity, the above Chinese buyer reportedly paid 55 per cent more than the Toronto bungalow was listed at.)

Not surprisingly, it is men that admitted they’d be more likely to enter a penis measuring, I mean, bidding war for a house.

By the BMO study, men were more willing than women to bid as much as 120 per cent of the list price. About one-third of men (34 per cent) said they’d overbid by 20 per cent, whereas only one-fifth (20 per cent) of women said the same.

Have you entered a bidding war for a home? If not, would you, and how much would you be willing to pay extra for a house you really love?

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...