Realty Executives of Sudbury Ltd.
The Caswell Team
The Caswell Team
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Sometimes buyers and sellers are presented with a multiple offer situation. This blog article will look at this real estate transaction scenario from a buyer’s perspective.
“Multiple offers”, also known as “competing offers” or even referred to as “bidding wars”, may occur for a variety of reasons - low inventory of listings, a listing strategy to withhold offers till a certain date or when a property is priced below current market value. Recognizing a well priced property often results in two or more potential buyers who are quick to respond by submitting a written offer at the same time.
So, as a buyer when faced with this scenario, do you compete or shy away? Does this mean you will be overpaying for a property? How do you make sure your still protected?
Here is where the value of working with an experienced Realtor® comes into the process. In my opinion, if you have found a property that you would like to purchase, there is no reason not to compete in a multiple offer situation. With your Realtor®, you have looked at properties while acquiring solid market knowledge along the way and have now found the one you want. Because of this familiarity with the market conditions, you have a very good understanding of value based on your previous viewings and, once you have reviewed sold comparable properties, you’re in a position to feel confident you are making an informed decision on how much you would like to offer on this property. I recommend that buyers put ‘their best foot forward” in a multiple offer situation so that, if you do not have the offer that the seller has chosen, you don’t have any regrets. Just to clarify, “best foot forward” means an offer that you have a clear understanding of the price and conditions that aligns with your comfort level based on the research, experience and guidance from your Realtor®.
A word of caution when ‘jumping in’ on a multiple offer situation. Although each situation is different, it is not mandatory to improve your offer by sacrificing clauses and conditions that will protect you as the buyer. A couple examples of these would be buyers removing their financing and/or home inspection conditions and, although it was somewhat commonplace over a decade ago, there are some real serious risks in today’s marketplace.
When it comes to the financing condition, a Buyer may be under the impression that their financing has been pre-approved and gives the instructions to their Realtor® to proceed without a condition that would allow a Buyer to verify that the financing portion of the agreement was indeed secure. In today’s financing world, there are huge risks with this due to much stricter lending practices than the past. Pre-approval means you’re conditionally approved, but the house hasn’t been yet and the info you provided to the lender must still be confirmed.
The other example may be the foregoing of a home inspection as an attempt to have your offer look better than the next. Now maybe you are a home builder, an electrician or an overall self-proclaimed home specialist and, now that you’ve given the property your best “once over”, you’re comfortable without further inspection. But a “once over” is not a thorough, unbiased inspection and major issues can be missed. Worse, if you’re not a seasoned building expert, are you willing to put yourself at risk of the potential deficiencies that may be exposed after you get the keys?
These are the discussions that take place between a buyer and their Realtor® prior to creating a competing offer that aligns with a buyer’s comfort level and specific needs. A Realtor® has the experience to guide you through the multiple offer situation and allow you to “jump in and put your best foot forward” and not “shy away” from missing “the one” without at least saying “we tried our best”.
Our team has an extensive track record in competing offer scenarios and, more often than not, achieve successful outcomes for our buyers. Although not all situations are “bidding wars” when buying, it’s a good idea to start with a team of experienced agents that are working with you right from the moment you start looking for your future home so you’re properly prepared to make confident and knowledgeable decisions together when the time is right to “jump in”. Never hesitate to contact us at firstname.lastname@example.org or call us at 705.586.3334 for any questions you may have and get prepared for the moment you find "the one".
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Disclaimer: The views and opinions expressed in this article are solely those of the author(s) and do not necessarily reflect the official policy or position of any other salespersons, staff or affiliates of Realty Executives of Sudbury LTD. Brokerage, Realty Executives International, the Sudbury Real Estate Board, Ontario Real Estate Association, Canadian Real Estate Association or any of their subsidiaries. For any concerns pertaining to the content herein, please contact us immediately at email@example.com.