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Multiple Offers. Buying and Selling in a hot market.

Wed, 20 May by joshuaprowse

Market Meter

Monthly Update

April 2015 Apr Apr
Mon May 1, 2015 2015 2014
Net Unconditional Sales: 840 664
New Listings: 1,413 1,521
Active Listings: 3,945 4,404

The real estate market in Victoria has continued to heat up as we move through the spring market, taking us firmly into seller’s market territory last month. It’s been so busy I’m getting this edition of the R.E.N. out a couple weeks late and I apologize for that.
In the last month I’ve been involved in 5 multiple offer situations, one working for the sellers, and 4 working with buyers, with 100% of my clients leaving the transaction happy. Competing against other people for the house you want can be nerve racking, frustrating, and can just as often end in disappointment as jubilation. There are no guarantees when competing but there are certainly things that can be done to improve your odds.
Buyers

  • Make sure all your ducks are in a row. I’m reasonably sure one of the competing situations my clients won didn’t have us at the highest price. The house was old and clearly had some issues that were disclosed to us as material latent defects. Because we knew the offers were being held off, and presented the following weekend, we had a building inspection done before we put the offer in, risking the cost of the inspection, but strengthening our offer by being able to go in without an inspection clause. We also had a pre-approval in place for financing, allowing the financing clause to be removed in just a few days.
  • Put your best foot forward. Although it isn’t always the highest bid that wins a multiple offer, it usually is. Forget about the asking price and figure out what the home is worth to you. Put your best offer forward first. Although negotiations can happen in a multiple offer situation, it’s far more common for one of the presented offers to be accepted as written. If you have any flexibility in your terms it can be useful to relay that information. Dates are a common sticking point so your ideal dates may not be the strongest option for the seller. If it’s vacant, a quick close is probably going to be more appealing to a seller.
  • Line up your service providers ahead of time. One of the offers we won required a hole to be dug to verify the existence of an underground oil storage tank. Before submitting the offer we had people ready to dig, scheduled, and we made sure the seller’s knew this when we submitted the offer. It allowed us a quick subject removal, and also helped instil confidence in the seller that we were serious, and ready to go.

Sellers

  • Preparation is Key. Although the market is hot, with just over 21% of the inventory turning over last month that still means almost 80% didn’t sell. A hot market doesn’t guarantee a bidding war, but careful preparation can make all the difference in the world. The consumer tends to start on-line these days. Presenting them with a high quality set of interactive tools like a virtual walk-through, an interactive floor plan, professional photographs and a carefully crafted and targeted description will help your home stand out, and work to get them through your front door.
  • Put your best foot forward. “You don’t get a second chance, to make a first impression”. In this case I would argue this isn’t entirely true. The first impression happens on-line but the critical impression is the one the Buyer gets when she arrives at your home. De-clutter, tidy, clean, repeat. Water your lawn, paint the front door, fix the leaky tap, and do some staging, either on your own, or hire a professional. The most traffic happens in the first week. Taking the time to make a great impression will pay off in spades.
  • Share your expectations in advance. Want the perfect offer? That may be wishful thinking but if you want a good offer that’s easy to deal with it’s best not to rely on mind reading skills. If there are dates you’d prefer, or a time frame that works for you, let me know so I can let Buyers know. Same goes for the mirror in the bathroom that’s a family heirloom. Although I would recommend removing any items that could be deal breakers, we need to at least make sure it’s clear what you aren’t willing to include. I know of a deal that fell apart over a garden gnome…

Seller’s markets create upward pressure on pricing, so as a buyer, waiting for things to cool off probably means waiting for the next pricing plateau, and this can be a pricey decision. As a Seller it’s a great time however, if you’re also going to be buying, you’re likely to see both sides. Multiple offers can be exciting, and fun, or stressful and frustrating. If you have any questions please don’t hesitate to contact me.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Victoria Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.