Yes, They’re Baaack! Multiple offers are back again and they’re likely to stay for a while because we’re in a seller’s market. Without sounding like a nagging parent, these multiple offers are here to stay until the supply issue is resolved or until the demand dies down. Following the trends though, the supply issue is here to stay and the immigration will keep flowing in.
Fight or Flight – Anybody who doesn’t follow the real estate market as closely as we do are often shell-shocked when they decide to finally get into the market. Some stay in a state of disbelief and think we’re lying to them, while others may understand what is going on and just proceeds to navigate through it. The information discussed in this Insight Article is largely focused on properties that are under one million dollars, which includes condos that are in the downtown core and semis and towns in the GTA.
Offers Here, There, Everywhere – As Spring is in full swing right now, I’m encountering more and more multiple offers on good properties. These are 3-bedroom semis and towns with 2 car parking spots, and 1-bedroom or 1 + den condos with parking spots. All of these unit types are in super high demand right now.
Offer nights usually present themselves with 3-4 offers. This is not nearly as crazy as back in 2016, but still competitive nonetheless. In next’s week Insight Article, I’ll provide you with a behind the scenes perspective, based on a highly sought-after property listing.
Top 3 Tips You Should Know! For this week, the following are my tips on how to navigate through a multiple offer situation:
- Get a Good Realtor
This may sound self-serving, but I’m completely serious. If you hire a new agent because they promised you some kind of commission rebate or you’re shopping around for an agent because you don’t see the value in having one, that’s ultimately your decision to make. Having a good Realtor on your side will give you good knowledge on pricing and non-biased, third-party advice on the offer date. Yes, you can use House Sigma and Bungol to see sold prices in the area but that’s only half the battle. As a buyer, you may have only had experience transacting real estate only 1 to 3 times at most, and oftentimes, not even in multiple offer situations. I encounter these multiple offer cases on a weekly basis, multiple times.
- Be Mortgage Approved
Whenever I speak to a client, I always ask if they have spoken to a mortgage broker first. The main reason for that is because if your mortgage is approved, then you know what your upper limit is. I try to not make you spend the maximum amount that you have been approved for, but rather, I normally focus on the best value product that you could afford. Sometimes, I would propose a different area or a different asset class. Second, knowing the maximum mortgage amount that you are approved for will also help you during the multiple offer situation as more often than not, there will be a time to improve your offer during offer night. Third, if the situation calls for it, you are able to waive your financing conditions in order to improve the terms of your offer. That will go a long way if the multiple offer situation gets heated.
- Have the Deposit Ready on Offer Night
Having the deposit ready on offer night will show that you have the money. Most of the time, money talks. You have to remember, until there is some kind of consideration for the contract, up to this point we’ve really only been pushing paper. Although both parties are legally bound to the contract even before the deposit cheque is received, the anxiety that many sellers have between receiving the deposit and accepting the offer is unreal. It’s like the old adage, “Show Me the Money.” That’s why having the deposit ready on offer night will go a really long way. Most of the time, a photo of the deposit is sufficient. If you are presenting it in person, then bring the deposit cheque with you. There is no harm in doing this because creating a bank draft is sometimes free, depending on your bank and your account type.
The Wrap – So those are the major tips on how to navigate through a multiple offer situation. There are obviously more minor strategies that one could utilize, but these major ones should be sufficient. In next week’s Insight Article, I’ll be providing you with some similar insight with multiple offers, but from the perspective of a seller and how to maximize a good property to get multiple offers and top dollar for your highly sought-after product.
Until Next Time, Happy Real Estate-ing,