You’ve found a home and you’d like to put in offer. Congratulations!
But, you’ve found out there’s a “delayed offer” date or bidding war. What does this mean and how will it play out?
We’ll take you through the process so you know exactly what to expect to better your chances at having the winning offer.
Here’s the top 5 bidding war questions we’re frequently asked:
- What’s a delayed offer date and how do I know when there is one?
In the GTA real estate market, roughly half of all listings will have a purposefully delayed offer date. The listing will usually state “seller will review offers, if any, on DD/MM/YYYY at X:00PM”. Sometimes this will be followed up with “seller reserves the right to accept a preemptive offer at their discretion” otherwise known as a “bully offer” (more on this at a later date). This commentary is typically only viewable by registered real estate agents on Realtor.ca. Even listings without a delayed offer date, may have one added after it’s live if there’s a lot of unexpected interest.
- Why do seller’s delay offers?
It’s currently a seller’s market in the GTA, there isn’t enough homes for sale to satisfy the demand and this almost guarantees bidding wars. By delaying all offers, the seller gives more buyers the chance to view the home and decide if they want to put in an offer. Otherwise, many homes would be sold within hours of hitting the market.
- Does this mean that the property will sell over asking price?
Not necessarily. Usually properties that sell over asking are properties priced below the market value, often intentionally. Without having someone who is actively involved in the market guiding you, it can be tough to determine value in such a dynamic market. Home prices from even two or three weeks ago can be much different than today, or next week’s prices. The best indicator for someone without intimate market knowledge is usually the amount of offers, though we have seen properties with multiple offers sell below the asking price before.
- When will I know how many offers there are?
Current offer counts are usually constantly updated by the listing agent to the buyer’s agent. Sounds simple, but the total count can be constantly changing. Often agents will state “please register offers by X:00PM”, where X is 1 or 2 hours before presentation time. Frequently, more than half of the offers come in after the deadline. This can be frustrating for people who played by the rules, however the final decision as to whether offers are allowed is up to the seller. I’ve yet to meet a seller who is willing to turn away a potential buyer. On the other hand, if there are several offers, some buyers pull their offer at the last minute if they think it’s too weak and would only drive up the price.
- How long does an offer presentation take and when will I know if I won?
If there are only 2-3 offers, it can take as little as an hour from start to finish. For additional offers, a good rule of thumb is to add an additional 10-15 minutes per offer. If there’s an opportunity to improve the offers (there usually is), this can easily add another 45-60 minutes to the entire process as buyer’s agents make changes. Once the seller has reviewed all offers/improvements, they’ll typically take a few minutes (longer if offers are very close) to make a decision and then the buyer’s agents will be contacted by the listing agent to let them know the outcome. You’re done and hopefully you’ve won! If you didn’t, unless a deal is “firm” and the seller has a deposit cheque in hand, don’t expect to know the final sale price for at least a few days, or more if conditional.
Navigating the bidding war process is always easier with an experienced real estate agent. We’ve been through the process more times than we can count and with our market knowledge we can advise and negotiate to give you the best chance of winning in this type of situation.
Use the contact form below to get in touch with us or feel free to call me, Jay, at 647-986-1304.
In the next week we will discuss various other topics regarding multiple offer/bidding war situations including: bully/preemptive offers, typical scenarios and how to maximize your investment as a seller. Stay tuned!