Condo Bidding Wars
By Condo Culture
With demand continuing to outpace supply in K-W, it has become a common occurrence for properties to receive multiple offers. A recent sale at the Kaufman Lofts, for example, went in multiples and sold over asking after being on the market for just 3 days. In this week's blog, we look at 9 key points to know and consider when faced with a multiple offer scenario.
When listing a property, the sellers may choose to accept offers as they are submitted or have a set date and time for offers to be received.
If an offer date is set and an offer is submitted prior to this date, it is considered a pre-emptive or 'bully' offer. A buyer may submit a bully offer in hopes of not having to compete with other buyers, and if attractive enough, it may be accepted by the seller.
Once a seller receives multiple offers, they can either accept, reject, counter or ask that offers be resubmitted.
In Ontario, offers will be accepted in a closed bid process. This means that while the seller's agent is required to inform all potential buyers of the number of written offers received, they can not disclose the amount of the offers or the terms.
Rules and regulations outlined in the Real Estate Brokerage Act prohibit selling agents from providing false information regarding the number of offers received in an attempt to get potential buyers to increase their offer price.
If a multiple offer scenario is expected, a buyer may want to make their offer more attractive by offering a price higher than list, putting in an offer without conditions (e.g. home inspection, financing) or having a desirable closing date or deposit.
Speaking with your bank or mortgage broker about financing can be extremely helpful in determining what you can afford and what your offer should be.
Once an offer is accepted without conditions, it is legally binding and a buyer can be at risk of losing their deposit if they no longer wish to proceed with that deal.
If a condo has received multiple offers, there is no guarantee that buyers will have an opportunity to negotiate or improve their initial offer. Offers therefore should be carefully considered and attractive to the seller, but also protect the buyer’s best interest.
While each situation is different, a knowledgeable and experienced Realtor can help navigate multiple offers and help determine the best strategy for you.