Multiple Offer Strategies

By Kathy Schmidt, Broker/Owner, Schmidt Realty Group Inc.

MULTIPLE OFFERS ARE BECOMING THE NORM… Here’s what you need to know!

Spring 2024 has been extremely competitive. Properties often go pending the first day they’re listed, and multiple offers are becoming the norm in some parts of the market. Buyers are wondering how to come out the winner in a multiple offer situation, and sellers are confused about which offer to take (there’s more to consider than price!). If you can relate, read on for some helpful tips whichever side of the table you’re on!

Strategies for buyers:

• While you may need to move fast if there’s other interest in your dream house, it doesn’t mean you should ignore important steps. Stop and ask yourself if this is truly the neighbourhood you want to live in? Does this house really work for you, or are you just tired of looking and competing for houses? If the property ticks a lot of the boxes, move ahead. But take a breath and hit pause (briefly) first.
• Don’t focus on whether or not you’re “paying over list price”. The seller may have intentionally priced their property on the lower side to encourage multiple offers. Ask your agent to show you what other similar homes nearby have sold for and rely on that information more than what the seller is asking.
• Give the seller what you can, where you can. If you can give them their possession date, even if it’s a bit sooner or later than your ideal date, do it. It might cost you a little more to double up in rent and mortgage payment for a few weeks, but if it gets you the house it might be worth it in the long run.
• If you can provide a large deposit, do it! The deposit is refundable if your offer isn’t accepted or if your conditions aren’t able to be met, and it’s much more powerful for a seller to see a $20,000 deposit than a $,5000 deposit. Because your deposit forms part of your down payment, in the end, it doesn’t cost you more, but it might help you get that place you really want!
• Keep the end goal in mind. This isn’t a game. It’s not about “beating out the other buyers”, it’s about getting you where you want to go!
• Work with a real estate agent you deeply trust and have complete confidence in! And take their advice!
• And lastly, if you’re on the fence about the house and are considering tossing in an offer at a lower price just to see what happens, consider not writing an offer at all. Every offer written creates more competition and drives up the final selling price of the house… that means that the next house in that neighbourhood will likely be listed for a higher price which might work against you. Write to win, or stay out of the game.

Strategies for sellers:

• One strategy can be to collect offers for a few days before responding, in the hopes of collecting a few offers and getting a better price. That can work well in a market where you’re almost guaranteed multiple offers. If your agent suggests that there’s a chance you could get a multiple, you might want to avoid the temptation to make buyers wait for hours (or days!) while you collect other offers. This can backfire badly… I’ve seen sellers try this and end up empty-handed. The buying process is stressful and making buyers wait increases their anxiety about the whole process. Some buyers will pull out of the process just to make the tension go away!
• When you get an offer, make sure you understand your options regarding advising other agents and their buyers about what’s happening. In most cases you’ll want your agent to reach out to other agents who’ve shown your home, but in some cases that might actually not be your best strategy. Your agent can advise you best on your individual situation. Take their advice!
• Don’t take everything at face value. Just because you have a few offers in front of you doesn’t mean you shouldn’t do your homework. Ask your agent to inquire about the buyers, their financial qualifications and their ability to follow through on the offer. If you can find out why they love your home, that will tell you a lot about which buyer might be your best buyer.
• Think “big picture”. When you put your home on the market you set a price. Focus on achieving that price with a solid offer that proceeds smoothly to possession. Not all offers complete, so listen carefully to your agent’s advice about which offer they think has the best chance of actually completing.
• Choose your agent carefully, making sure that you have a good rapport and that your expectations for communication are clearly set out and agreed to. The agent you choose has a significant impact on your sale, and when it comes to negotiating multiple offers you need the right agent in your corner! Ask agents about their strategies for creating and maximizing your opportunities in this fast-paced market before you choose who will advocate for you and protect your interests.

Every offer scenario is different, and your best strategy may not be the same as that of another buyer or seller. In real estate we have a saying … “Every job is a custom job.”  Whether you’re a buyer or a seller, there are 3 things to keep in mind that will help you in any offer scenario, whether you’re competing or not:

• Take a breath and slow the process down, even for a few minutes, to get your emotions in check. This is a big financial transaction and while it’s exciting, being able to set your emotions aside is incredibly important.
• Keep the big picture in mind. Why are you moving? How will you feel when you get there? What will it take to make that happen?
• Choose your agent carefully, then listen carefully to their advice.

At SCHMIDT, we’ve safely guided thousands of buyers and sellers safely through the offer process, including multiple offers, so we’re confident we can get you safely where you want to go too! Plus we’ve got a lot of experience and a few tricks up our sleeve to give you an edge in any offer scenario. Reach out anytime to chat about your real estate plans! We’d love to be your guide and advocate!