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A few years ago, multiple offers were a somewhat rare situation in the Ottawa real estate market, but have become common recently in certain neighbourhoods and for certain types of homes. Multiple offers can seem overwhelming but in reality, there is nothing to worry about! Whether you are looking to buy a home that has garnered a lot of interest or are looking to sell your home in this hot market, our Royal LePage Team Realty Realtors® are here to guide you through this process. Our training and experience will ensure that your interests will be protected. Read on to find out more.
What are multiple offers and how do they work?
If more than one party has submitted an offer on a particular property at the same time, this is a multiple offer situation. In this case, all offers are presented to the seller and the seller has several options available to them. The seller may choose to accept one of the offers, they may counter back one of the offers, they may reject all of the offers or they may ask to have some or all of the offers resubmitted.
Why are there suddenly so many multiple offer situations in Ottawa real estate?
The number of properties available for sale, in both the residential and condominium markets is very low. Ottawa has record low unemployment rates and we are experiencing growth in the hi-tech sector so the number of potential buyers is higher than usual. The demand is outpacing the supply so that is why we are experiencing so many multiple offer situations.
As a Buyer, what can I do to ensure that my offer is competitive?
If you would like to be successful in getting your offer on a property accepted, you will want to work closely with your Realtor® and let them guide you through the process. Remember, as a buyer, hiring a Realtor® does not cost you because in most cases as the commission is paid by the seller.
In a multiple offer situation you generally do not have the same opportunity to negotiate as you would if you had the only offer on the property. You should assume that you have one chance to submit your offer and have the seller accept it. Therefore when you are preparing your offer here are some important factors to consider:
- Price – the most important of the factors. You need to know what the house is worth, what it will appraise for, and how much are you willing to spend. You may need to offer more than the asking price in order to get your offer accepted.
- Closing Date – a closing date as close as possible to the request of the sellers will obviously be more appealing.
- Deposit –a larger deposit may demonstrate to the seller that the buyer is more committed to purchasing the property.
- Conditions – the buyer wants to make their offer as attractive for the seller as possible. Given this, an offer with the fewest conditions possible may be more likely to be accepted in this situation but it’s important to protect your interests if you are the buyer. There are a number of ways to accomplish this; you could have a building inspection done before presenting your offer, you can get pre-qualified for your mortgage financing and discuss the specific property with your lender. The buyer is more at risk if they decide to submit an offer with no conditions, but they increase the chance that the offer will accepted by presenting a “clean” offer.
- Intentions – whenever possible it is important that the buyer’s agent present the offer to the seller. The agent can “sell” the buyers and their offer to the sellers. If that option is not available it is for buyers to provide “letters” to the seller telling them who they are and what they intend to do with the house (no one wants to hear that their family home will be torn down so this can have a positive impact).
If I put an offer on a home, will I be able to find out what the other offers are?
No, this is a closed process meaning that you will not know the contents of the other offers that are being considered nor will your Realtor®. There are a few facts that must be disclosed to all parties who have submitted an offer. This includes how many competing offers have been received, if the seller’s brokerage is representing one or more of the buyers and if there is a financial advantage to the seller from any of the buyers. This is why it is so important to put your best foot forward on the offer.
As a seller, what can I expect if my home receives multiple offers?
If your Realtor® believes that your home may be likely to receive multiple offers, there are some strategies that should be considered. You could accept offers as they come, you could accept offers only after a certain date. You could also have an arrangement with your Realtor® that you will not be informed of any offers until a certain date. This decision must be made before the property is put on the market and should you decide to delay the offer date there is an additional form that is required to be signed. This will ensure that everyone is aware of the timelines and are able to get their offer in. As a seller you can change your mind on how you want to deal with the timing of offer presentations. If you do change your mind your Realtor® must make sure that all interested parties are made aware of any changes to the presentation process. Once you begin to deal with offers the decision process can be overwhelming. This is where the experience and training of your Realtor® will prove invaluable. They can take all the information and present it to you in a way that you can make best decision possible. Ultimately, it is your decision on which offer you would like to accept.
What are “bully offers”?
A bully is an offer that is presented to the seller prior to the time that the seller set for the presentation of offers. If the seller chooses to look at the bully offer, all other interested parties must be notified of the change as soon as possible.
If you have any questions about multiple offers or anything real estate related our non-selling managers and our Royal LePage Team Realty Realtors® are always here to help.