Ottawa’s real estate is heating up. We’re seeing low inventory, rising prices, and frustrated Buyers… but Sellers are happy. With this recent swing in the market, multiple offers are becoming more common on listings. A multiple offer scenario occurs when there is more than one offer on a property at the same time. As a result, the offers will compete against each other to woo the Seller into selecting their offer. Now you may think, ok I’ll just bid higher than the other person and I’ll win, right? Wrong!
Multiple Offer Best Practices
There are many best practices and strategies involved n the multiple offer process. We’ve put together an overview to give you insight into what the process is like.
1. Set an Offer Presentation Date
Offer presentation dates are becoming more popular in today’s market to due to low inventory, rising prices, and a hungry group of Buyers. One way that Sellers are taking advantage of this is with offer presentation dates. These dates are intended to create a multiple offer scenario (or bidding war for all the Million Dollar Listing viewers 😊). Typically, the presentation date is 10 days after the unit has been listed.
2.Offer Presentation Process
Once all offers have been submitted prior to the Offer Presentation time, the Listing Agent will review each offer with the Seller. During this process, the number of offers submitted must be disclosed. Any specifics of each offer can not be disclosed to the other Realtors® or Buyers, only the Listing Agent and Sellers know all the offer details.
3.Select the Best Offer
The Sellers will rank each offer based on their personal needs; typically, they are looking for the most money possible (shocker!), no conditions (for a firm sale), and their preferred closing date. Once the Seller decides on the winning offer, the Listing Agent will be informing the winning Realtor® of the goods news and will be the bearer of bad news to the Realtors® that lost out.
Tips to Winning a Property in Multiple Offer Scenarios
If you see a place you like, be prepared to go all in on the property or forget about it.
Have Your Financing in Order
The #1 killer of any offer in an offer presentation scenario is a financing condition. It shows the Seller that Buyer is not prepared in a hot market.
Complete a Pre-Inspection
For the Buyer, it gives a complete picture of the property and what needs to be fixed, allowing a Buyer to make a more informed decision on the final price they are willing to pay for a property, all things considerd. From a Seller’s perspective, it shows a Buyer’s level of interest and makes that offer more competitive
Review Market Data
Review the sales data in the neighbourhood or building to get a grasp on the historical sales to ensure the most informed decision prior to submitting, or accepting, an offer.
Write a Love Letter
Write a little note to the Seller about who you are, your background, why you love the home, and what life milestones you want to accomplish in the property. It’s small details like these that can make you stand out.
Determine How Much Over Asking You Are Willing to Pay
The more offers there are, typically the higher the final selling price. Wherever you sit on the motivation spectrum, it’s important to know how much above asking price you are willing to pay.
Know What Number to Walk Away At
A common mistake most Buyers make in the process is not offering their top dollar. After they take all of their motivations into consideration, they tend to offer less than what their maximum. The best piece of advice I can give you, which I give to all of my clients, is to put the highest offer in that you are comfortable knowing if you lose you can go to sleep that night knowing you put your best foot forward.
Stalk the offer presentation spot!
A preface to my following point, stalking is not cool or legal! Now that’s out of the way, here’s why you should stalk the location of where the offer presentation is being held. First, you can present your offer with your Realtor® in person. Next, it gives you the flexibility to change your offer on the spot. If you’ve been told there are only three offers on hand before the presentation and last second three other offers come in, you are there with your Realtor® and ready to re-submit. Finally, it makes you available to the Seller. If you’re the only Buyer outside the offer presentation and closest to the Listing Agent, they are almost always coming to see you first.
Multiple offers create a unique dynamic between Buyers and Sellers. Typically, Sellers hold all the cards and Buyers are forced to accommodate Sellers during the process. Hopefully these tips can put more control back in the Buyers hands to get the condo that fits their lifestyle.