Let’s talk bidding wars (multiple offer situations)
So far this year Ottawa has seen 21.95% of its homes sell in multiple offer situations. This is quite a change from last year’s 13.53% and 8% in 2016. It indicates a seller’s market with low inventory yet plenty of buyers willing to pay more. Inventory overall is 23% lower this year than last.
Has Sandy Hill had any bidding wars this year? Absolutely. There have been five bidding wars so far. That is about 14% of all sales and here they are:
• 72 Marlborough, asking $719K
• 120 Blackburn, asking $589K
• 342 Wilbrod, asking $699K
• 195 Augusta, asking $499K
• 14 Blackburn, asking $799K
All sold for more than their asking price. Most sold in fewer than two weeks.
This kind of result is often achieved when the seller chooses a more aggressive price rather than a bullish or higher one from the suggested range. When a seller stays under a big threshold price, which often increases in increments of $25,000, and chooses $449,000 instead of $455,000, or $799,000 instead of $820,000, then a larger buyer pool will be tapped into and, bingo, you create a perfect opportunity for multiple offers. This pushes your selling price up to where you wanted it—without the long wait, the possible price reductions, the often long negotiations and, don’t forget, the stress.
This phenomenon also happens when inventory is low and buyers are plentiful, our present situation. Sometimes the asking price is irrelevant in this type of market. There are so many buyers that at least one of them is prepared to go BIG.
What happens when a seller receives more than one offer? Offer content is only revealed to the seller and his/her realtor. Other interested realtors and their buyers are told only the number of offers submitted but with no indication as to the price offered or any other details. Once all the offers are in, and all the agents are informed of the number of competing offers, all buyers are given the chance to revise their offer, if they wish, before it is presented to the seller. It truly is a “blind auction.”
It is very popular for buyers to attach personal letters and family pictures to try to gain more notice and favour with the seller. Believe me, these letters and pictures are taken to heart, but in the end only one offer can be dealt with and usually, but not always, the highest offers wins the bidding war. Realtors know how to create this buzz, they delay offers, giving buyers time to get their “ducks in a row,” such as financing approvals and building inspections, before the offer date. Buyers have a better chance of being successful if their offer has no conditions. We call that a cash offer. In the last article I mentioned that sellers should do a home inspection before going to market. This report is often relied upon if a buyer is competing and has no time to do his/her own inspection.
I’ve mentioned to you before that, as a realtor, I hate to see a SOLD sign go up the same day a property goes on MLS (Multiple Listing Service). To me, the property was not exposed to the wider market, the opportunity for multiple offers was lost. Money might have been left on the table. In Sandy Hill we are seeing a great many properties selling privately to developers. I often wonder how much those sellers might be losing out on. Will a developer offer you top dollar? Going to the open MLS market is the best way to know the real value of your home.
If you are planning to sell this year, be prepared! You might have more than one offer on your hands.
Sandy Hill real estate statistics
March 8 to May 8, 2018
15 active listings, 2 conditionally sold listings, 9 sold listings
65 active, 4 conditionally sold, 14 sold
Condo sales still leading the market in Sandy Hill.