Competing Offers: The Process, Part 1

Competing Offers Have Resurfaced on Selected Properties

Spring has once again given rise to competing offers, mostly in price ranges that are affordable to the greatest number of buyers.

So What is the Process for Offer Presentations

Under Ontario regulations, an offer must be conveyed to the seller as soon as is reasonably possible unless the Seller directs otherwise.

Today a listing may inform agents to have a 48-hour irrevocable date. This means that a buyer’s offer should allow up to that much time for the offer to be presented and responded to by the Seller. A buyer though might make an offer with less time for a response.

The Delayed Offer Presentation

A seller might want to delay presentation and consideration of offers to a particular time and date. This strategy is used to hopefully obtain competing offers. In today’s market, the use of this strategy works best if you list your property just under or within market value range. Overpricing will not attract competing offers.

Pros and Cons of Delayed Offer Presentations

To employ the delayed offer presentation method, it’s important you review the pros and cons with your REALTOR®. For example, on the pro side, this approach may generate increased interest and the best market price because of having received multiple offers. On the negative side, if a buyer does not want to wait, you might lose out on what could possibly have been a good offer. As well, if the presentation date goes by with no offers, your property’s desirability might be lessened. Some buyers might suspect that the property is overpriced, so proper pricing is critical for this method to work.

Preemptive Offers

A delayed offer presentation can also initiate pre-emptive offers, also known as “bully offers.’” Buyers do this to avoid the delayed offer process in an attempt to circumvent competing with other offers. A Seller’s written direction must clearly explain how he/she wants to handle pre-emptive offers. As suggested by RECO, Ontario’s regulator, you might ask yourself, “If a pre-emptive offer came in and you were not told about it, how would you feel?” “Do you not want to be informed of any pre-emptive offers at all?” Consider pre-emptive offers before presentation date? Be notified of a pre-emptive offer but not look at the details?” See the offer’s details without considering it until offer presentation? These are questions your REALTOR® should bring to your attention. Your direction needs to be clear and in writing.

As a seller, if you decide to change your direction or your presentation date, your agent must change the listing remarks to reflect this change, and notify anyone who has expressed an interest in the property; specifically: parties who have viewed the property, have booked a viewing, have submitted an offer or said they will be submitting one. Look for Part 2 in our next newsletter.