Buying a Home in Kitsilano
The spring market is in full swing, and we’ve seen a few listings sell with multiple offers. Interestingly, we’re seeing many listings get multiple offers, whereas others get no offers, showing that Buyers want something specific, and are willing to fight for it. Good for the Seller, not so good for the Buyers. We experienced a situation recently with one of our listing – a cosy Kitsilano townhouse, filled with character, solid fir floors, brick fireplace, private backyard, tons of storage, 2 levels and custom built-ins. The open houses were busy and everyone was told we would be looking at offers Monday evening. We received offers, they were sent back to the Buyers with the opportunity to improve their bid, then one was accepted and our Sellers were very happy.
What is a Multiple Offer Situation?
A multiple offer situation is when a listing receives more than one offer at one time. In this situation, the Seller goes through every offer they’ve received, and either accepts one, denies them all, or goes back to each Buyer and asks for a better offer. The Seller’s realtor is obligated to let every Buyer know that there is another offer on the table. This allows each Buyer to go in with what is their best and strongest offer (i.e. highest price offer and fewest number of subjects), which is generally how you have to play in multiple offers.
The question then becomes – at what point are you overpaying for the property in order to become the new owner? As your Realtor, I would never suggest that you pay $500,000 for a home worth $400,000 just because you can afford it and need to make a good offer in a multiple offer situation (this is an extreme example). Think about fair market value, possible resale value, the strain on your finances and most importantly, how happy you’ll be with this decision.
How to Approach a Multiple Offer Situation as a Buyer
It doesn’t often take too much more than list price to win at multiple offers. Usually, you must accept the completion dates that work for the Sellers (they have the control, so why would they accept an offer that doesn’t work for them?). You can also try to limit or forgo your subject clauses. Many Buyers try an have the inspection prior to writing the offer (if the Seller allows this), or if the house seems to be in good shape, they forgo the inspection clause entirely. Many people may increase their deposit amount to strengthen their offer. Finally, you can remove the financing clause if you are ABSOLUTELY sure your financing will be approved upon an accepted offer.
When heading into a multiple offer situation, ensure you know beforehand your ceiling price. You don’t want to go over this amount as a flood of emotions hits you when you’re being told by the Sellers that they have another higher priced offer. As your Realtor, I would outline the best and worse case situations so you have a good idea of possibilities and a game plan to deal with each.
Even if you weren’t the winning bid on a home with multiple offers, just remember that it’s one less person looking for the same type of house as you (and presumably this person has more to spend than you) and hopefully one less situation where you could have competition on buying a home. Keep your head high and stay in tune with the market.