It has been an active real estate market in Guelph over the last several months. And while many Guelph residents may think of bidding wars as a very Toronto-esque aspect of real estate, we have indeed seen a number of multiple offer situations in the Guelph region.
So what does that mean for Guelph property buyers, and how exactly do multiple offer situations work?
Well, let’s start with how bidding wars, as they are sometimes called, work – and why they exist. In a hot seller’s market, like we’ve seen in Guelph in the last few months, there are simply more buyers than sellers. As a result, homes that are priced fairly and have plenty to offer are selling quickly.
A multiple offer situation can come up in one of two circumstances.
First, it can just… happen. A home comes on the market, the owner works with a Realtor to set a fair price and due to the home’s features, neighbourhood or other benefits, and more than one buyer decides to make an offer on the home.
In other cases, it can be part of a selling strategy, where a Realtor and seller price the home conservatively, get broad exposure to the house through advertising, open houses, etc. Buyers are typically advised that the seller won’t accept offers until a certain day and time. In this scenario, the whole point (for the seller) is to create a climate that attracts multiple offers.
If you’re a buyer and you’re faced with a multiple offer situation, there are a few things to consider.
First, your initial offer must not be viewed as a way to ‘test the waters,’ but rather to try to win the attention of the sellers. The sellers will review all offers; you want yours to stand out from the crowd and be chosen as the offer that the sellers want to work with.
What does that mean? It means, in short, if you really want to buy that house, put a strong offer forward. Consult with your Realtor and offer a fair price along with terms and conditions that would likely be reasonable and attractive to a seller.
One of the biggest challenges for buyers during a multiple offer situation is the struggle to keep emotions at bay. Easier said than done! I, too, have walked into a house and “fallen in love” within minutes. It’s hard to remain objective, but you must try. This is a financial transaction and emotions can and do get in the way of sound judgment calls.
As an example, you may be tempted to waive a home inspection condition for an offer, thinking that might be very attractive to the seller. No doubt, it may be – but is that in your best interests? You may similarly be tempted to pay above market value for the home. While ultimately, a house is worth to you whatever you think it’s worth – if you overpay for a home and your circumstances change and you must sell it sooner than expected, the decision to pay more than fair market value could come back to haunt you.
Multiple offer situations can be highly stressful. Be sure to consult with your Realtor throughout the process in order to get the expert advice you need to protect your financial best interests.
If you’re looking for a Guelph real estate agent, please feel free to contact me at your convenience.
