How to deal with multiple offers in a seller’s market.
Currently there is an increase in the number of people wanting to buy homes while at the same time the number of those wanting to sell has decreased resulting in a ‘Sellers Market’.
In this kind of market it is not uncommon to have more than one buyer interested in a property. In these circumstances the property’s asking price and it’s selling price can vastly differ. This scenario is great if you are the seller but as a buyer there are a few factors to consider when in a multiple offer situation.
In Ontario, the seller’s real estate broker or salesperson is required to disclose the number of competing offers to all buyers who have submitted a written offer. However, the terms and conditions of each offer are confidential to the seller and their broker or salesperson.
Your Realtor’s Role in a Multiple Offer Situation
The seller’s real estate broker or salesperson represents the interests of the seller in the transaction. The decisions about how offers are presented and responded to, as well as which offer is accepted, are made by the seller.
The buyer’s real estate broker or salesperson represents the interests of the buyer in the transaction. The
buyer makes the final decisions related to their offer, including the important decision of whether or not they want to participate in a competing offer situation.
In some situations, the real estate broker or salesperson will represent the interests of both seller and buyer or multiple buyers. Consumers should seek guidance from their real estate broker or salesperson if this situation arises.
Tips for Buyers
The seller will obviously want to get the best price they can for their property, but the offer they choose or not choose could also have to do with subjects and conditions that go along with it.
In a competing offer situation, buyers may be tempted to offer more for the property than they planned to and/or remove conditions from offers that are intended to protect them.
Before participating in a competing offer situation, buyers should consider factors such as:
How much can the buyer afford to offer for the property and how much is the property worth? A high offer could enhance the buyer’s chance of success. However, it may not be the best long-term financial decision for the buyer. A competing offer situation does not necessarily mean that a property will sell for more than the asking price. Similarly, an offer that meets or exceeds the asking price will not guarantee that a buyer’s offer is accepted.
Buyers should be aware that pre-qualifying for a mortgage does not safely eliminate the need for a financing condition in an offer.
I currently have multiple buyers looking for their perfect home so if you’re thinking of selling or just want to know what your house may be worth, contact me for a free, no obligation evaluation of your propety.
If you are thinking of buying…start your home search now and let me help you find the home that is right for you.