Competing Offers: What You Need to Know for a Winning Outcome
Competing offers occur in every market, but none more frequent than in a seller’s market. If you are buying or selling the following should help.
Competing offers dictate a shorter and faster time-line. Time and Information are of the essence.
What you should know if you are a Buyer:
In most instances, price is the final decision maker. Despite of a well drafted offer, another competing offer may come at a higher price and money talks. However, a well prepared offer, if similar in price and terms, can put you in the driver’s seat.
- Know when offers are being presented and where.
- Know how many offers you are potentially competing against.
- Keep a short irrevocable – If your Realtor is presenting offers at 8:00 p.m. give the seller until 9:00 or 9:30 p.m. to accept. This way they have little chance of negotiating another offer while yours is in play.
- Be on immediate standby with your Realtor in case a change is required to the offer. (Best to be outside, while your offer is being presented by your Realtor).
- During the offer presentation, have your Realtor tell the seller a little bit about you ( a hand written letter on why you like the house is also a nice touch).
- Get a signed statement from the listing Realtor and the seller identifying the # of offers being presented.
- If you are pre-qualified obtain the lender’s approval in writing. This can promote and help seller confidence in selecting the final offer.
- Understand that terms and conditions are always a factor in selling a home. The fewer conditions in an offer, the more favourable your offer.
- Have your Realtor ask about the Seller’s ideal closing date and make sure you give it to them.
- Get a copy of the SPIS/survey/etc., from the seller before presention of your offer (this adds buyer’s confidence and also reduces wording in the offer).
- Minimize inclusions and stay with what is offered, i.e., resist the urge to ask for more inclusions than what is offered on the listening agreement.
- Consider investing in a pre-building inspection so this condition is not in your offer; or if you must have it, pre-book a building inspection and during your offer presentation let the seller know you have a inspector on stand-by and can do it on a specific date..
- REMEMBER, market value is determined by what a buyer is willing to pay and what a seller is willing to accept.
- Avoid dealing in round numbers. Add $100 or any other number to the price. This way if two offers are almost identical, it may tilt a decision in your favour.
- Give as large a deposit as possible: $5,000, $7,500 even $10,000. This shows you are commitment and have financial resources to complete the transaction.
- Include the deposit cheque with the offer or clearly state that a certified deposit cheque will be presented upon acceptance of the offer.
- Offer numbers that you will say, ‘I wouldn't pay a penny more’. This way if you do loose the property you won’t say, ‘I would have paid that’.
If you are the Seller:
- Share with everyone the same information that you have already agreed to in writing (your Realtor will coach you).
- Know that the buyer's agent may request presenting the offer on their buyer's behalf (ask your Realtor what you should say or not say).
- Take the time to discuss all the offers with your Realtor and ask for positive and negative points of each offer.
- Get as many details as possible about the buyer from the Realtor bringing you the offer (i.e., is the buyer pre-qualified? Do they have a house to sell?)
Of course, if you are buying or selling and working with me Peter Sardelis, I will make sure you have enough information to make good, sound decisions.