The following information is as per The Real Estate Council of Ontario:
In certain market conditions, consumers may find
that more than one buyer is interested in a property.
This is a competing offer situation and creates unique
conditions in a real estate transaction. Both sellers
and buyers need to consider how to respond when
presented with a competing offer situation. Working
closely with your real estate broker or salesperson will
ensure that you understand the process.
In Ontario, the seller’s real estate broker or salesperson
is required to disclose the number of competing
offers to all buyers who have submitted a written
offer. However, the terms and conditions of each
offer are confidential to the seller and their broker or
Working with a real estate broker
The seller’s real estate broker or salesperson represents
the interests of the seller in the transaction. The
decisions about how offers are presented and
responded to, as well as which offer is accepted, are
made by the seller.
The buyer’s real estate broker or salesperson represents
the interests of the buyer in the transaction. The
buyer makes the final decisions related to their offer,
including the important decision of whether or not
they want to participate in a competing offer situation.
In some situations, the real estate broker or
salesperson will represent the interests of both seller
and buyer or multiple buyers. Consumers should seek
guidance from their real estate broker or salesperson if
this situation arises.
Tips for Buyers
In a competing offer situation, buyers may be tempted
to offer more for the property than they planned
to and/or remove conditions from offers that are
intended to protect them.
Before participating in a competing offer situation,
buyers should consider factors such as:
How much can the buyer afford to offer for the
property and how much is the property worth? A high offer could enhance the buyer’s chance of success.
However, it may not be the best long-term financial
decision for the buyer. A competing offer situation
does not necessarily mean that a property will sell for
more than the asking price. Similarly, an offer that
meets or exceeds the asking price will not guarantee
that a buyer’s offer is accepted.
Buyers should be aware that pre-qualifying for a
mortgage does not safely eliminate the need for a
financing condition in an offer.
In competing offer situations, it can be tempting not
to include a clause in an offer that makes it conditional
on a home inspection. While your offer might be
more acceptable to the seller, you may later learn
that there are property defects, required repairs or
needed upgrades that you weren’t aware of. In some
cases, this can be expensive in the short or long-term.
Foregoing a home inspection is a significant risk that a
buyer needs to carefully consider.
Tips for Sellers
A seller facing competing offers has to consider how
they want to deal with the situation. The seller can
decide to: accept the best offer; negotiate with one
buyer and reject all other offers; negotiate with one
buyer and advise other buyers that their offers are
being set aside while the seller negotiates; or reject all
Even in a competing offer situation, buyers have
other options and may choose not to continue to
participate. A seller may attempt to negotiate only
to find out that it was the best offer the buyer could
present. In the meantime, other buyers have found
new properties they are interested in.
The seller’s real estate broker or salesperson can
provide advice and guidance, ensuring that the
obligations and the options available are understood.