As Ottawa continues to be a hot market with a low inventory, the number of multiple offer situations seems to be on the rise. When a home goes to “multiple offers”, all offers on the home must be made at a set time and the seller is able to choose which one they would like to go with or negotiate. This can be a complicated situation for buyers and sellers so here is what you can expect. Keep in mind though that the most important thing you can do as either a buyer or seller in these situations, is to consult with your Realtor so that you are prepared; they are the experts!
Multiple Offers for Sellers
If your Realtor feels that your home may attract significant attention before listing, or if once listed it is getting lots of attention, they may speak to you about a multiple offer directive. If you choose to go this route, all offers must be presented at the same time and you will be given a chance to review each one before deciding on which one to go with or which one to negotiate with. This can be very lucrative for sellers as offers will often be made to be the most appealing to the seller (higher than asking, waiving conditions etc.)
Sometimes, another Realtor may contact your listing agent to see if they can make an offer prior to the set time. This is called a “bully” offer. If you choose to entertain this offer, all other interested parties must be notified as well. It is important to note that you do not need to entertain a “bully” offer but your Realtor is obligated to inform you if one should come up.
As you navigate the process of multiple offers, it is important to work closely with your Realtor and make sure to ask questions!
Multiple Offers for Buyers
If the home of your dreams is in a popular neighbourhood or has attracted a lot of attention, the sellers may choose to consider multiple offers. If this is the case, you will need to consider carefully the offer you would like to make and your Buyer’s Representative can assist you with this process. Ask your Realtor lots of questions and work with them to come up with an effective strategy. You will want to be sure to make your offer as appealing as possible by considering the following factors:
- Price – you will likely want to offer asking or higher but be careful because a house that sells for far more than it is worth may not be mortgageable with the bank for the full price.
- Closing Date – a closing date as close as possible to the requests of the sellers will obviously be more appealing.
- Deposit – some people believe that a larger deposit shows a more serious buyer.
- Conditions – this is a risky choice but a more competitive offer may waive all conditions; please consider the implications before making this decision!
- Intentions – it is common in a multiple offer situation 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!)