Home buyers are showing less interest in holdback offers due to bidding war fatigue.
What are "holding off offers" or "holdback offers”?
“Holdback Offers are a marketing tool whereby the property is listed for five per cent under market value and offers are held back for a week. They are taken on a certain date in anticipation of multiple offers with the property selling for 10 per cent or more over the asking price”. (Suzzanne Hudson, Huffingtonpost.ca) See full article, Ask a Realtor: Don't Hold Back on Holdback Offers
The Canadian Real Estate Association (CREA) reported that low residential inventory in May contributed to the practice resulting in multiple over asking offers.
"Whether we're talking about existing homeowners or people looking to purchase for the first time, there is no shortage of buyers in the marketplace today. So, while the record number of home sales through the first five months of 2016 is not necessarily surprising, it does sometimes mask the larger story in the GTA: the shortage of listings, which has resulted in strong upward pressure on home prices," said Mr. McLean (Toronto Real Estate Board President).
What are some details about 'holding offers'?
- The house is often under priced to attract buyer attention.
- All offers are held for review until a certain date and specific time
- An appearance of unconditional multiple offers are created.
What have Home Buyers learned about 'holding offers'?
- A time sensitive offer appealing to your emotions may not be the smartest decision.
- Unconditional offers may result in regret as issues may arise after have possession.
- Winning a bidding war can potentially risk your current and future financial position.
This article from Condo.ca stresses the risky nature of the unconditional offer in this highly competitive Real Estate environment.
When making an offer, it is important to think smart, know your numbers and educate yourself.
Peter Kaliszek REALTOR® CENTURY 21® Heritage Group Ltd., Brokerage* 100-17035 Yonge Street, Newmarket, ON L3Y 5Y1 Office: 905-895-1822 Extension 2455