It’s Tuesday night. Your favorite show is taping on your PVR but where are you? Hint – NOT on the couch watching it. Instead you’re sitting in your Realtor’s car with the engine turned off; parked on a dark street. Dinner resembles some version of takeout. There’s lights on in all the houses on the street you’re on and you can see a lot of what the people in those houses are doing, making you feel kind of like a burglar stalking the neighbourhood scene. You’re nervous. Someone else wants the same house you’ve fallen in love with. You’ve just withdrawn 30 or so thousand dollars and handed it in the form of a bank draft to your Realtor to hold. Your nervousness is accentuated by the fact that you can see at least 5 other cars with groups of people inside them – (us Realtors and our sedan-style, tinted-window cars stand out) – doing exactly what you are doing. You are all waiting for one single thing. A text message to say, “It’s your turn.”
Welcome to Multiple Offer Night. If you’ve never done this before, allow me to describe how multiple offers work:
The Toronto Housing Market is competitive. REALLY competitive. With almost no new ground-level residential housing being built in the core of the city anymore, the houses that do exist are becoming increasing more sought after. So you want a 3 bedroom, 2 bathroom home on a nice street? Ya, so does everyone else. As a result it is customary that when sellers and their Realtor list a desirable property (like a 3 bedroom, 2 bathroom gem on a tree-lined street in, say, Riverdale), they hold back offers until the following week so that everyone gets a chance to bid. You’ll usually see the property get listed on a Tuesday, Wednesday or Thursday and – noted in the broker remarks on an MLS listing – “hold back” offers until the beginning to middle of the following week.
What does “holding back” mean? It means that you’ll book a showing with your Realtor, see it, love it but have to wait to put in an offer.
Here’s what happens after the showing is over:
1. The listing Realtor with their seller client sets the ground rules. For example: “Offers to be registered at 5:00PM and presentation to begin at 7:00PM sharp.” The presentations are usually held at the property or the listing brokerage’s office.
2. Once you’ve decided, “Yup, I wanna do this”, your Realtor “registers” your offer. This means she has to call up the listing brokerage’s office and make it known that she has an offer. Your Realtor will need to do it by a certain time on the day of offers, usually 5:00 or 6:00PM.
3. As the day proceeds and the offer registration deadline inches closer and closer, your Realtor will update you on whether additional offers are registered. By 6:00PM you should have a pretty good idea of what kind of competition you’re up against.
4. You and your Realtor, if you haven’t already, will have to meet and sign up all the offer paperwork. She will have instructed you to get a bank draft drawn up with the deposit money in hand. Why you ask? Because if there’s 10 offers on offer night, a firm one with money in hand is a whole lot more attractive than one without.
5. You and your Realtor will go together or meet up close to where the offer presentations are happening. Sometimes this is a coffee shop. Sometimes this is your Realtor’s car. It’s good to be close in case you are called back to improve with impossibly short irrevocability.
6. Remember how this article began? You in a dark car waiting for a text? That’s what’s next. Your Realtor will be with you until she is texted or called summoning her to come and present. You’ll be staying behind. Usually the order in which buyer Realtors are given to present is in order in which their offers were registered
7. Your Realtor will go in and present your offer. She’ll be introduced more than likely to the seller(s) and the listing agent. She’ll be sharply dressed and incredibly charming, ready to sell the hell out of how awesome YOU are and how much YOU love and should have this home. And then she’ll verbally walk the sellers and their Realtor through your [awesome] offer. In Toronto if you’re up against multiple offers you’re highly advised – if you want any chance against the competition – to have a clean, firm offer. That means no conditions. The price you offer is 98% of the time different than the asking price too.
8. Back to the car or coffee shop – you all wait. Sometimes this process repeats itself (they ask you to make the offer better), sometimes you’re thanked but told no cigar and that you can go home now, and other times you get the exciting call that you got the place.
For me multiple offer representation on your behalf is single handedly the most exciting aspect of my job. I LOVE being your advisor, your statistician, your phone slave, your biggest advocate and your winning edge. For you on the flip, multiple offer nights are stressful and nerve-wracking, at some points disappointing, but almost always exciting too. The night you win the house of your dreams amid multiple offers is a story you will repeatedly tell at dinner parties for at least the next decade.
**********A side note: A recent article in Toronto Life describes the market right now as “manic” using words like “ruthless agents”, “vicious bidding wars”, “winners and losers” and “no-inspection nightmares.” Here’s what I think of this editorial hype: (1) It’s a competitive market because of a lack of inventory and a steady rise in appreciation….but it’s not manic. (2) While there are certainly different styles of Realtors out there, some who might be construed as ruthless, a lot of us are not. I consider myself your advisor. I spend a ridiculous amount of time making sure that you are armed with the right numbers for making a solid offer price decision and representing you in the most ethical and professional way possible. (3) When there’s more than one offer it’s not a war — it’s about me helping you be strategic enough to win with the money that you feel the home is worth to you. You’re not a loser if you walk away before the uneducated other bidder did (4) The market demands we sometimes let go of a home inspection clause but this doesn’t mean just go and offer on a house that you don’t know the bones of. There’s pre-listing home inspections often available and an opportunity for you and I to go in before offer night and conduct our own as options. Have questions or concerns about buying a home in this market after reading this article? Call or email me any time for free advice!