How to Handle Multiple Offers on a House | RE/MAX nova
A lot has changed since the COVID-19 pandemic turned our lives and our economy upside down. But as the Halifax housing market starts to rebound, it’s clear one thing hasn’t changed: It’s still a seller’s market.
Of course, things aren’t exactly what they were. The pace is slower and inventory, which was low before the market virtually shut down, is at historic lows right now. This means whether you’re buying or selling a home in Halifax, there’s a good chance you’ll be dealing with a multiple offer situation and all the excitement and frustration that comes with it.
“On the buying side it can obviously be frustrating, for sure. Your hopes can be dashed on the house that you’re really hoping to get. And on the selling side it can be really exciting and fun.” says RE/MAX agent Andy Sawler.
In this post, we’ll share some tips on handling multiple offer situations for buyers and sellers.
Low inventory pushing prices up
This summer, as restrictions have started to ease, we’re seeing what we typically see in the busy spring market. Buyers are resuming their search and sellers are slowly moving forward to list their homes.
But because there are more buyers and fewer homes to choose from, bidding wars are now common with houses sometimes going for $50,000 to $80,000 over list price.
You might be wondering why there aren’t more houses on the market. That’s actually a complicated question. “That’s a very popular topic of conversation and everyone has their own take on that, “ says Andy.
Sometimes it’s simply that buyers might want to sell but have nowhere to go. For instance, older people might be interested in downsizing, but moving into an apartment isn’t easy – rents are high and vacancy rates are low. And then there’s the COVID factor. Some homeowners, who may have been thinking about listing before, might be deciding to stay put until it becomes clearer where things are headed with the post-pandemic economy.
The reality is it’s a new world for buyers, sellers and agents, and now, more than ever, it’s important to be prepared.
For buyers: Be ready to act fast.
Remember the good old days when you could look at several houses, take a few days to mull things over, crunch the numbers and then go back for a second viewing? Those days are gone.
“You have to see it and be prepared to act, if it’s the right one,” says Andy. “If you get into a property that you like and it’s reasonably priced, there’s a good chance that you’ll be competing and it will be tight timelines.”
You have to be organized and prepared because you likely won’t have time to get things in order once you decide to make an offer.
Here are five ways to make sure you’re ready:
Know what you want. Have a complete list of must-haves and nice-to-haves.
Free up your schedule so you can view properties on short notice.
Set up e-signing capabilities for quick responses.
Get pre-approved for financing.
Have your deposit ready.
As a buyer in a seller’s market, if you know you’re in a bidding war here are six tips to ensure your offer stands out from the crowd:
Price – It’s no surprise that price is the top deciding factor. About 40% of sales are sold over asking price, so keep your pencil sharp. Offering 10% over asking is not uncommon on popular properties.
Closing date – If possible, give the seller the closing date they want.
Terms – Make your due diligence or condition dates as simple as possible and complete them within a short timeline.
Deposit – The larger the deposit the more it shows the seller you’re serious and have access money.
Make it personal – Write a letter to let the seller know who you and your family are and why you like the house. But be genuine.
Listen to your agent – Agents should have a good understanding of the situation and can provide invaluable advice to increase your chances of being successful.
RE/MAX nova agents are now routinely dealing with multiple offer situations and they’ve had to adjust to the new reality as well. Broker Ryan Hartlen says the important thing is good communication during every phase of the process. “You have to realize this is a stressful situation for everyone,” says Ryan. “It’s important that agents, buyers and sellers all communicate clearly, fairly and quickly as the process unfolds.”
For sellers: Have a game plan.
Just like buyers, sellers need to be fully prepared. This is no time to wing it. It’s important to know that a multiple offer situation is possible and if it does, things often move quickly. Work with your agent ahead of time and come up with a strategy. Decide in advance how you’re going to handle competing offers and answer key questions: How long will you take to review the offers? What terms are most important to you? What does a best offer look like? One suggestion is to pick a time and day you’ll review all offers and communicate that to other agents and buyers.
If competing offers come in, here are your four options as a seller:
Accept one and reject the rest.
Reject all of them.
Accept one and counter with another with an appropriate back-up clause.
Counter one.
Where’s the Halifax housing market headed?
That’s the million-dollar question. So far, the statistics show that prices are going nowhere but up, especially with many single-family homes in Halifax selling at or over asking price. This bodes well for prices in the near future. Despite some reports of a significant drop in Canadian housing prices this year, RE/MAX is predicting 2020 prices in Halifax will be stable or even slightly higher than last year. We’ll delve deeper into the outlook for the Halifax housing market in an upcoming blog post.
