● How to deal with multiple offers
● How to pick the best offer in a bidding war
The housing market continues to be HOT in Ottawa and sellers are often faced with multiple offers. Knowing which offer to accept is not always easy for homeowners. It is not just a question of which offer has the most money attached: there are a number of other conditions and contingencies that can add value to the sale.
The Bob Blake team has extensive experience in helping Ottawa area sellers navigate the confusion and excitement of bidding wars. We can help you figure out the proper strategy when receiving multiple buying offers.
In this blog post, we’ll look at what goes into differentiating between different offers and conditions so that you can pick the best one to maximize your profits. Have a read, and then drop us a line when you’re ready to start the conversation about listing your home.
Multiple offers: comparing apples to oranges
One of the difficulties in knowing how to pick the best offer in a bidding war is that you’re not necessarily comparing apples to apples, oranges to oranges. That is to say, there may be unique combinations of conditions that make some offers worth more than others, regardless of the dollar amount. It is essential then, to have a clear idea of which conditions are needs vs. wants for you, and also to prioritize these conditions.
Conditions to consider and prioritize
Beyond the bottom line, here are some of the different conditions that might make an offer more attractive for you. Be sure to decide which ones matter most before you need to wade through multiple offers.
1. Closing date
Think about when you want to move out. Offers that seem to be higher could end up costing you more if you have to put your furniture in storage while waiting on your next property to be ready, for example. Or you could end up paying several more months of property tax and utilities after you’ve already moved out.
Unless you have conducted a pre-listing inspection and know for certain that there are no major issues to deal with in your home, offers which are not conditional on a home inspection are likely better for you as the seller. Repairs to roofs, windows, foundations, HVAC systems, etc. can take a big bite out of potential profits if the home inspector identifies any problems to the buyer before closing.
Offers which are conditional upon the buyer receiving financing are usually more risky than those without. That being said, some buyers will raise their offering price to account for this and extra risk and it could work out well for you in the end. Always look for details about whether the buyer is pre-qualified, pre-approved, or poised to pay at closing.
4. Closing costs
Does the buyer want you to pay for some or all of their closing costs? Check for the “seller assist” clause. This condition is more likely to show up in a buyer’s market than a bidding war, but check just the same.
5. Sale of existing home
Similar to financing, any offers which are contingent on the buyer selling their home first can leave you open for an offer that falls flat. If the sale of the buyer’s home is a condition of purchase, be sure that there are some strong positives for choosing this offer to counterbalance the risk you’re taking.
6. Fixtures and appliances
Think about whether or not you want to keep any of your fixtures and appliances (even if it’s just to sell them afterwards for more profit) or whether there’s value in skipping the hassle of having them uninstalled, moved, stored and/or re-installed.
How to respond to multiple offers
Once you have decided on your priorities for getting the most value out of your listing, you can choose how to respond to multiple offers from a position of power. After reviewing each of the offers one by one with your real estate agent, you might consider one of these four common tactics:
Respond to all offers with “best and final”. Essentially, you’re informing all of the buyers that they’ve got stiff competition and you want them to come back with their absolute highest bid and best terms.
Accept the best one if it ticks all of your boxes that we discussed above. It can be tempting to ask for even more, but if there’s a dream offer, don’t blow it - you could scare them off and be left with sub-par offers to choose from.
Make a short-list of the best offers and negotiate with the relevant parties.
If none of the offers are close enough to what you want, you can reject all of the offers.
Don’t go it alone
As exciting as it is to be on the receiving end of multiple offers, it can also be incredibly confusing and stressful. Don’t let additional value and profit slip through your fingers by not knowing how to interpret and select the best offer for you.
By working with an experienced and award-winning real estate agent (like Bob!) you’ll be able to better understand exactly what is being offered and how it affects your bottom line.
Reach out to the team here at Bob Blake - we’re Ottawa’s real estate experts and are here to help.
Let’s do this!