Are we able to see what others are offering before we make ours?
This has been a more common question lately, as many transactions are taking place with multiple (competing) offers. Sellers represented by real estate brokerages in Ontario accept offers in what is referred to as closed bidding process, so you won’t know how much other buyers are offering, or any of the terms or conditions within them.
Ontario law requires that the seller’s brokerage disclose to potential buyers certain information in a competing offer situation like the total number of offers submitted, whether any of the buyers are represented by the same brokerage as the seller, and whether the seller’s brokerage has an agreement to reduce their commission if their buyer is successful, among other things.
Seeking advice from experts, such as a real estate salesperson, real estate lawyer and a mortgage financing professional before deciding whether you want to participate in a competing offer situation is a wise idea. If you choose to move forward with an offer, you need to be prepared for how the competing offers may affect your offer and map out a negotiation strategy that will work best for you.
Consult with your real estate representative to find out what you can about the offer situation and what you are entitled to know. Once you’re satisfied with what you find out, work closely with your salesperson to put your best offer forward. Your salesperson will need to know what you are willing to offer for the property, what conditions if any, what terms may be essential for you and any other factors that are important to you in the purchase. Once you submit your offer one of three things is likely to happen. The seller might:
- accept your offer,
- reject it, or
- counteroffer (make you an offer based on their terms).
Counteroffers are not a given; sometimes a seller will give one or more buyers a chance to “improve” their offer, but this is not guaranteed.
Multiple offer or “bidding war” situations can ignite the competitive streak in some people. I was told a story of two first-time home buyers weeping in their car while waiting for one of their offers on their third attempt to be considered. It was only after submitting their third improved offer that they realized the offer they’d just put forward was far more than they’d be comfortable paying. I was told that they literally let out a tear-filled sigh of relief when they were eliminated from the process. This goes to show how important it is to keep your wits about you, especially when you’re one of several people vying for a property. Don’t let your emotions get the better of you, no matter how much you want the property or want to “win”. The great thing about Ontario is that it is filled with beautiful neighbourhoods and many spectacular homes, and if you’re patient, you’ll find the one that’s right for you.
If you have a question about the home buying or selling process, please call or email me.
This article courtesy of “Ask Joe” at RECO