Toronto Buyers and Agents Need to get Creative with Offers in Today’s Market
Bidding wars are nothing new in Toronto’s market. At the height of the real estate boom last year, it wasn’t uncommon to see seven or more offers on any one property. But the fact is that now, Toronto buyers are fed up. They’ll do just about anything to prevent getting involved in a bidding war, even if it means walking away from what they believe to be their dream home. But now, with buyers and agents getting more creative about buying, you may be able to view your dream home – and buy it too.
One age-old strategy that was used by agents was to prevent bidding wars was to submit their buyer’s offer with only a few minutes left on the offer deadline. By placing an offer that the agent knew was probably more than the other offers, this practice gave other buyers too little time to top that offer. Now though, some agents are going in the opposite direction to prevent bidding wars – presenting offers far below asking price, and well ahead of the deadline time.
This strategy recently worked for one Toronto real estate agent, Robin Pope. When his buyers were interested in a Toronto property, he submitted an offer that was $75,000 lower than the original asking price. And he submitted it the morning before the 5:00 deadline the following day. The offer was in fact, received so early that the seller’s agent phoned Pope just to ensure that he didn’t have his days mixed up.
He didn’t, and his strategy worked. The home received no other offers, and although the sellers did negotiate a higher price, the buyers still got the exact home they wanted, and without having to fight off any other buyers to get it.
Pope says that one reason why it worked is simply because of the unpredictable housing market in Toronto right now. Buyers are simply war-weary, he says, and no longer have the motivation to fight with other buyers over a home. Not when there are so many others on the market, and not when sellers are starting to become desperate.
But, he says, the news isn’t bad for either buyers or sellers. In fact, this is the way real estate transactions were done for a long time. Buyers submitted an offer, and if it was rejected, a counter-offer was proposed by the sellers. If the buyers still didn’t like it, they would produce another counter-offer, above their original offer but below what the sellers ask for. This process would go back and forth until all parties could find a number they were happy with.
And that, says Pope, is the way the real estate business should be.