Multiple Offers What will you do?
One of the sure signs of a 'hot' real estate market is a lot of interest, or even competition, for the most desirable listings. Heightened buyer interest may even result in a multiple offer situation, or what is sometimes called a "bidding war".
Potential buyers thinking of submitting an offer in a multiple offer situation should make sure your opening offer is a good one, because it may also be the last one. Remember, you're in competition against other bids so you should base your offer on the assumption that you may only get one chance for it to be seen. Plan to go in with your best offer - and assume the other bidders will too. Remember that the vast majority of homes sell within a few percentage points of their list price, even without a multiple offer situation. Don't hold back expecting that there will be further negotiations where you can counter offer with a higher price.
When the seller's sales representative fields the offers, they will view them all before they make any decision to proceed. There are several options available to the seller and which one they take is dependent on many factors, including the amount and terms of the offers presented, and the seller's urgency and need to sell for a specific price or within a certain time frame. If the offers are close in price and terms, the seller's representative may recommend that they do not accept any of the offers, and send them all back in the hopes that one or more will return with a better offer. This may even result in another multiple offer situation, but it also runs the risk that none of the bidders may come back with another offer. Alternatively, the seller's representative may suggest that they work with one offer that is seen as the most favourable. While the seller may be presented with several offers, they can only choose to work with one. Since a counter-offer or "sign-back" from the vendor is legally binding, they cannot make offers to other potential buyers while one is in play. If you do get a counter offer back, it means that you've won out against the competition on the first cut. If you accept that 'signed-back' offer as is, you've got a deal. However, if you make any further adjustments to the seller's counter offer, you have essentially refused that offer. Now everything is back up for negotiation again. The seller is under no obligation to honour the price or any of the terms of their earlier offer to you.
During the bidding and negotiating process, buyers should remember there are many aspects of an offer that have value besides price. The offer that will appeal to sellers will generally be the one that comes closest to all the terms of the listing and ensures a trouble-free closing. Try to keep to the seller's preferred closing date. In a multiple offer situation, make every effort to eliminate as many conditions as possible, even short term ones. For example, you may be able to get pre-approved financing rather than add it as a condition. David Pylyp, your sales professional can advise you on how to make an appealing offer.
Consider some examples; do your homework, investigate the neighbourhood. eliminate conditions for inspection financing and lawyer, you are welcome to inspect the property PRIOR to making your offer, pre approve the financing, talk with your lawyer prior to the offer, seriously consider the price offered, increase your deposit as a sign of your ability to close, close fast or leave it to the seller, know your limits, guage the potential competition, be present during the offer presentation, consider an offer with an escalating price clause; where you will top any bonafide offer by $ 500.,