The Guide | Winning a Multiple Offer
Sadly, the new norm is consistently battling in multiple offer situations in the Comox Valley. It is not unusual to compete against 5-20 other Buyers for the same property with prices sky-rocketing, far surpassing any existing comps in the same neighbourhood. Listings are scarce and people are feeling real pressure to find a place to call home in all price points.
Realtors typically post a new listing, book 2-4 days of select viewing times (staggered with Covid-19 protocols in mind) with a few days to a week for proper market exposure prior to reviewing all offers. This is a practice we have been using as listing agents for years as it drives the sale price up. With our low inventory market, all Realtors seem to have adopted this practice.
There is the odd time where a “Bully Offer” is presented prior to Presentation date, a “too good to refuse” style offer that will steal the opportunity from the countless other buyers waiting to offer on the scheduled Presentation date.
When considering your offer, ultimately, money talks. The majority of Sellers will choose to accept or counter the offer with the highest price. Even though the offer is the highest, they may take the opportunity to counter for dates or terms more agreeable to them.
A Seller’s Considerations
A Seller may counter one offer at time. The Seller can counter price, terms, and dates.
If 2 or more offers are the same, the Seller may inform the tied Buyers to adjust their offer to their best and final. One Buyer may not be able to go higher, but another might have the ability to raise their price. That Buyer will now likely win.
A Seller may counter multiple offers at the same time, for the risk of accidentally accepting more than one offer exists and would be a disaster.
A Buyer’s Best Chance
When writing an offer, a Buyer needs to decide what price, terms and dates they wish to put forward. In a multiple offer, however, the pressure is on to be the most appealing of all offers, therefore, it is essential to make your best offer from the beginning
We recommend you include a thoughtful note with a photo of your family, whether it is a single offer situation or a multiple offer situation. We have seen this tactic of putting a family and heart behind the contract be the difference in a seller accepting our offer against others or accepting a price they might not otherwise have considered. Home ownership can be a deeply personal, emotional and human experience. It involves love and loss, growth and change and houses all the chapters of someone’s life. Some people value this above money and appreciate getting to know the people behind the contract.
Money talks. In a low pressure offer situation we would consider the comps and make an offer based on a Buyer’s ability as well as the existing sales comparable to justify the market value. In today’s market this no longer applies. The combination of scarcity of listings, desperation of Buyers and a global pandemic that has seen more people from more expensive markets cashing out to start a quieter life, our prices have been driven to an all time unprecedented high. We have recently been in offer situations where 4 or 5 of us have hovered around $30-$40k over asking, only to find out a cash buyer came in $75k over asking with no conditions.
Terms are always a huge deciding factor when a Seller is considering an offer. This entails what the Buyer is asking to be included (ie. a shed, a fridge, etc), the date they wish to pay for and take possession of the property, the size and deadline for the deposit and the conditions on the offer. If a property is vacant, chances are the Seller wishes to have a quick completion to avoid paying insurance and property taxes. If it is Seller or Tenant occupied, they likely want more time or want the move out dates to coincide with their next move. It’s important to ask the Selling agent ahead of time what the Seller’s ideal dates and inclusions are. Shockingly, many people are now coming into a purchase with “No Conditions”. This is something we have always advised against and goes deeply against our own personal Code of Ethics as Realtors. There is a great burden of risk to the Buyer to forgo the opportunity to have proper inspections (home, water, septic, drainage, etc). There are a myriad of potential latent defects which could cost a Buyer a small (or large) fortune in the years to come. If a Buyer is pre-approved with their mortgage, it does not mean the house itself will pass the Appraisal, so the Buyer is also at risk of being unable to complete (and likely face a lawsuit). Unfortunately, some Buyers can afford the risk or go in with bad advice. It will be near impossible to compete against an Unconditional offer. Doing as much due diligence prior to your offer is paramount to your chances of success. Thoroughly review and approve of the Property Disclosure Statement, Title (have your lawyer/notary review for you), Property file (including zoning and permits), review the existing Insurance information, have all documents to your Lender ASAP, and pre-book a building inspection or pay to have one conducted prior to Offer presentation. This is another risk, but a less expensive one than inheriting expensive home repairs. Have as few conditions as possible, and tighten the dates to be as short as reasonable.
There are a few other tricks we have up our sleeves that we reserve for our active Buyers - you know what they say, hold back 10%!
We hope this information serves you and you are not too discouraged as you are home shopping in the Comox Valley. We typically see a rise in listing numbers through the spring and hope that, although there has been nothing typical about the past year, that we will at least see that trend hold true. Hang in there, have a qualified and reputable Realtor working diligently on your behalf, be safe and try to find small joys in this experience.