"Holding-Back" On Offers

"Holding-Off" On Offers Photo Save for those two frosty seasons of uncertainty, stagnation, and price reductions that we experienced last fall and winter, “multiple offers” have been and are now a very common occurrence in the Toronto real estate market.

In a seller’s market, which is what we’ve been in for the last four months, demand outweighs supply and there are more buyers that there are properties for sale.

As a result any attractive, well priced property is going to receive quite a bit of attention.

A recent listing of mine in the St. Lawrence Market area had a handful of showings booked within just a few hours of going on the market.

Over the course of the next few days we had almost 50 showings in total, received 3 competing offers, and sold the property for an above-asking sale price!

In such an active market, what’s the best strategy for a seller looking to maximize the exposure of their property?

My personal feeling is that it’s in the seller’s best interest to “hold-back” on reviewing any offers until a specified date (which is exactly what we did for the above mentioned listing in St Lawrence Market).

For example, let’s say that I list a client’s property on a Wednesday morning.

By late afternoon we may have had three or four showings and by early evening maybe even a submitted offer.

And this offer may be an attractive one - full asking price, reasonable terms, etc.

But... there have only been three or four showings at this point.

There are potentially another 20, 30, 40.... other active buyers out there that haven’t had the opportunity to see the property yet.

What if one or more of these others buyers would submit an offer if they had the chance?

What if they're willing to pay more than what the current buyer is offering?

What if they're willing to submit a firm, unconditional offer?

Not allowing any offers to be submitted until a specified future date (generally 5-7 days after the property first comes on the market) ensures that everyone who is currently in the market for such a property gets a chance to view it and potentially submit an offer.

The sellers then can rest assured that whatever happens come offer day, the property has received maximum exposure.

Holding-back on offers actually benefits the buyers in a number of ways as well.

For example, I’m often working with buyers who need a day or two’s notice to make themselves available for showings.

Or sometimes buyers are out of town for a few days and unable to view the property until they return.

In this way, leaving the property on the market for a reasonable amount of time before considering any offers ensures that more than just the handful of buyers who are able to drop everything at a moment’s notice have a shot at buying the property.

Holding-back also helps to avoid buyers feeling as though they're rushing into a decision, as it allows them plenty of time to:

• Speak with their mortgage broker about the possibility of not including a financing condition in their offer.

• Review the comparable sales figures with their Realtor to arrive at a maximum dollar amount that they’re comfortable spending.

• Review the pre-listing home inspection (in the case of a freehold home) or the status certificate (in the case of a condo/loft) if either of these is available prior to the offer date.

It's safe to say that as long as the market keeps up the current pace and there's a steady stream of motivated, qualified buyers, multiple-offers will continue to be commonplace and hold-back offer dates will remain a fixture on many calendars.

If you’re thinking of selling and would like to find out more about my marketing plan, feel free to contact me for more info.

For more info on submitting an offer, visit my website here.