In today’s Comox Valley Real Estate environment there are currently more multiple offer scenarios than in the past few years. Not every property listed for sale goes into multiple offers, but recently many have.
As a buyer, you might wonder “if there are no offers yet what is wrong with the house, am I over-paying?” and on the other side of the coin “Argh, multiple offers, now I have to compete and overpay to get the house!”
As a seller, you might wonder “Did I not ask enough for the house?”
Recently, I showed a house that had been on the market for 2 years. We put in an offer and BOOM, multiple offers. You have no idea what everyone else’s timelines are, you only know yours.
Lately, there have been properties with more than five competing offers. If that’s the case, you have to be serious, sharpen your pencil and decide, is this the house you want?
There are a few things to remember when you are having those thoughts.
- Everyone is in a different stage of their house-hunting journey. Some are just starting, some have been looking for a while, some have been looking for a long time.
- Everyone is looking for something that suits their needs. This may not be the same thing you are looking for, or what you are selling.
- The market will ultimately dictate the price of a house.
- Use your gut. If it feels wrong, it probably is not right for you. It might be perfect for the next person so don’t feel you are “missing out”.
- If you are going to need a mortgage, make sure you are pre-approved. If you can get a pre-approval letter, even better.
- A letter about yourselves can go a long way. There is still very much a personal touch to Real Estate and people like to know who they are selling their home to.
- Stick to your game while keeping in mind this: If you love the house, go in at your best offer. Would you prefer to lose the property by being $5000, 10,000, 25,000 to low, or get the property by paying 5000, 10,000, 25,000 to much? You know your budget, play within it and live with the outcome.
My biggest piece of advice on this is that you don’t want to regret losing the house because you decided not to put your best foot forward.
What happens in a multiple offer situation?
When 2 or more offers come in, the Seller’s Real Estate agent must let the Buyer’s Real Estate agent know they are in a multiple offer situation and ask if they would like to revise the offer. At that point, you decide what you want to do. Do you want to stay where you are, revise your offer or drop out and walk away? The Seller will review the offers and they have a few options.
1. Take the offer they like the best
2. Take one of the offers and go back and negotiate with that offer.
You may wonder why someone would do that. Here is an example. Suppose there are 2 offers. One has no conditions, but the price is a bit lower and the dates don’t line up perfectly for the Sellers needs. The other offer has lots of conditions, but the price is higher and the dates line up. The Seller may go back to one or the other offer and ask for changes (higher price, different dates, less conditions).
Selling a house and receiving multiple offers sounds great, but is it really? In most instances, yes, it is great for the seller. You can force the buyers’ hands so that there is less back and forth, cleaner conditions, faster closings. Sometimes, though, when a buyer hears about multiple offers they can pull out and advise they do not want to participate. If there are more than 2 offers there is a lower risk of losing all offers.
As a Seller, if you receive a great offer and you hear there are other offers coming in you can advise your agent, in writing, that you do not wish to receive any other offers. Stick to the first one you received and be done with it. This is a decision you can make with your Selling Agent. They will advise you of the best option for you, ultimately you decide.
The Buying and Selling of a home is stressful, exciting, nerve-wracking and in the end, exhilarating. Sometimes multiple offers happen, sometimes they do not. Being prepared in advance is the best course of action.