Anyone in the market to buy a home in Toronto would be well-accustomed to the notion of a bidding war. The concept is almost ubiquitous with Toronto Real Estate. Recently, a client told me he wasn’t interested in seeing a house that would likely go into multiple offers. I wondered if he’d ever get a shot at buying that prized four-bedroom home in one of Toronto’s coveted neighbourhoods. The fact is there are more Buyers than Sellers, and we’re indeed in the midst of New Listings lull, compared to previous years. Add to this the common tactic of under-pricing a home when listed, and virtually any Toronto home on the market will draw a crowd.
After mulling-over my client’s comment, it occurred to me he is either deathly afraid of biting off more than he could chew, overpaying or he doesn’t yet understand the process. With that, here’s what you might expect when your Buyer Agent anticipates multiple offers.
The Offer Date
You find that home, walk through the doors and know it’s yours. Sometimes, that realization comes all at once or through careful consideration. Either way, you’re ready to place and offer. But, you need to wait. Most Toronto listings now have an “Offer Date” with a very specific Date/Time, and method for presenting your offer. The offer date is generally within a week to ten days from the original list date.
Beware of the BIG BAD BULLY
Sometimes, a would-be Buyer is impatient and will simply pay top dollar to secure the property before the Offer Date. This tactic might seem unfair to some and many agents discourage the practise. Much was written on the topic. The CBC published an article on the subject Ontario Realtors Advise Ford Government to End Bully Offers. Whether or not you love or hate the practise, it’s a tactic that is often used by Buyers to snag that beloved property. It may not always be ‘nice’. Just like that proverbial school yard, there’s usually Bully lingering in the background.
Offer Night: Immaculate Midtown Executive Home. Asking Price: $1,899,000
After a week with dozens of showings and tremendous interest at the Open Houses the Offer Night presentation was scheduled and Buyer-Agents were asked to bring their client’s best offer to the Merton Street Office for Bosley Real Estate Brokerage. One by one, each agent sat across from the Sellers and the listing agent in a bid to present their offer, share a little about who their clients are, and why they are a good fit for house. All told, there were sixteen offers presented and sixteen agents sitting in the office reception area with their would-be Buyers standing-by anxiously awaiting the news.
On this night, Buyers had just one shot to present their BEST offer. There was to be no second round or another opportunity to increase their offer price. At other times, a Listing Agent may invite the top Buyers back with a chance to make a better offer. This is often the moment when those of who truly love the house dig deeper into their pockets while other Buyers step back from the process. For Sellers, the bottom line price is not always the final determinate. The closing date, conditions such as Financing and Inspections, even a sense of whether or not a Buyer could follow-through on the purchase are all factored in the final decision. Lastly, it’s the Buyer’s story that could potentially win the Seller’s favour, even at a lower price. Write a letter and be as memorable to the Sellers as possible. Take any possible advantage.
The evening ended with just one triumphant Buyer who would claim their prize of this move-in-ready home in a top-tier school district. The home sold for $550,000 over the asking price for a sold price of $2,450,000. The Buyer with the winning bid simply would not risk losing the house and placed an offer no one else would match. In today’s market, it’s not enough to simply have the means and the will to purchase a home, it also takes nerves of steel.
Sound Daunting? It can be, but it’s important to know your upper limit and be prepared to put it on the table.