Dealing with multiple offers
A bidding war certainly isn't a new concept. Ask any realtor, real estate investor or homeowner with a few moves under their belt and they will likely have a few stories for you. But the multiple offer situations that we have seen during the past year or so in some cities across southwestern Ontario are something different altogether. With desirable homes across the GTA receiving anywhere from 10 or 30 offers within hours of listing, for a couple hundred thousand over asking price, it's a whole new ballgame out there for realtors, sellers and buyers. When in doubt, your sales representative is your best source for guidance and advice through the process, but here are a few basic tips:
Should you always go with the highest bidder? Not necessarily. That offer, thousands over your asking price, may be conditional on financing, a home inspection and the buyer selling their home. While the money is attractive, you have to question whether you should effectively take your house off the market while waiting for the buyer to firm up. Those conditions make it much less appealing than the competing prospect that came in with no conditions, albeit at a lower price. So what is a seller to do?
That depends on you and what's most important. If it's money, you have your answer. If you need a firm closing date, then you need to go with the offer that lines up with yours. Perhaps you're more comfortable with the buyer who put down a deposit of $20,000 compared to the one who wrote a cheque for $5,000. An offer to purchase with more money is definitely attractive, but if their terms don't meet yours, a lower-priced offer with fewer strings may be best.
When more than one offer comes in, you generally have one of three options: accept one of the offers because you like the terms, counter one of the offers and change those terms that are not acceptable or you can ask the bidders – whether there are two or 17 – to improve their offers. But be warned this final tactic can leave you high and dry.
With the help of your realtor, consider what is important to you, the pros and cons of each scenario and try to determine what will work best for you. (RMM)