Let's get this out of the way. Buying a house on an offer day is terrible. Toronto sellers have been secretly planning, fixing, cleaning, and staging your dream home to get you and everyone else overly excited.
Spot The Offer Day
Unfortunately, offer day instructions are hidden in the Broker Remarks section of a listing, which isn’t made public on Realtor.ca or any other websites that get TRREB’s MLS listings feed. If something looks fantastic, and is priced very attractively, it very likely has an offer day. Connect with your Realtor who can let you know the full story and history of the property, and arrange a showing to evaluate the home.
What Do I Offer?
Assuming you’ve seen the house and like it, you now have a long list of questions and scenarios in your mind. The easiest way to handle your thoughts for an offer day is to assume there will be multiple offers. Assume you will need to put your best foot forward. Do the homework in advance. Evaluate the likely available pre-list home inspection, and firm up your mortgage outlook with your bank or lender. This will allow you the confidence to make a firm (unconditional) offer. Bottom line, a conditional offer puts the risk of your financing and/or home inspection in the seller's hands. If you make a firm offer, you are taking the risk.
The Offer DayThe key here is to simplify your offer, making it as clean and straightforward as possible. Most buyers just offer what the sellers are including/excluding on their listing and try to offer a closing day that the seller prefers. There will be a time to register your offer, and approximately 2 hours later your offer will be submitted. The idea of registering is to give you the opportunity to know the number of other buyers you will be competing with. Don’t be frustrated by late buyers who don’t register on time. If there is 1 other offer, or 10 it shouldn't really change what you are doing. You need to be confident and comfortable with what you’re offering. If there are more than 3 offers, there will very likely be a 2nd round; an opportunity for buyers to improve their offer. At this time listing agents give feedback on how the offer can be improved. Many people focus on the price, but good listing agents will also try to improve all the factors of the offer for the seller, including the deposit, closing date, terms and conditions.
Should I Bully?
Now that offer days have been around for a while, a common strategy is to bring a pre-emptive or bully offer for the seller before their scheduled offer date. It takes a confident buyer, who has a strong pulse on the market, knowing the offer day will see multiple offers to bring a bully. Almost all bully offers are firm, with a bank draft deposit herewith at a price point that appeals to the sellers and matches or exceeds their expectations. Only buyers with a strong sense of the market should bully, as it’s the easiest way to get the strongest case of buyer's remorse otherwise.
Did I Win?With multiple offers, buyers get competitive, and want to “win”. Winning should be defined as purchasing the property within a budget you are satisfied with. Sometimes winning is not buying the property at a crazy price, and waiting for the next one. Sellers can be the winners too, you know.
For free information or if have any real estate questions, or even considering buying a home, call us at 416-222-1212 or email us at firstname.lastname@example.org. We would love to help you.