Real Estate

Competing offers

In the past you would hear about competing offers, bully offers, multiple offers, and it would scare you away, or make you feel that you overpaid

The Hamilton Real Estate Market is still red hot and that brings competing offers that can still be a great opportunity to snag a property but sometimes it backfires.  In the past you would hear about competing offers, bully offers, multiple offers, and it would scare you away, or make you feel that you overpaid, but the market is changing and so are competing offers. It seems to me that buyers have become more informed about the market and are not giving into the pressure of offering way over asking to secure a property but are instead structuring offers to be competitive rather than expensive.


In the past you would just offer a boat load of money and hope your offer was the highest and you would win, and that may be part of today's offers but you have to make sure it is structured properly at the same time. Price is always the main factor in most people’s decision but the validity of the offer is pulling more weight than ever before. The validity of the offer is time, money and the ability to get it completed. Too many offers have been falling apart due to financing that savvy agents realize that a closed deal is always the best deal. The highest price with conditions is not as attractive as it once was. Conditions mean that the offer may have a high price tag but the condition based on inspections or financing can break the deal and more and more deals are falling apart due to financing than ever before. The banks are backing out for a myriad of reasons and when they see you offer way over asking it may be the reason you do not get financing.  
This is why the validity of the offer is more important to the deal than just the price. If an offer comes in lower in price but with no conditions — it will become a strong offer to those who know what they are doing. You may give up the money to close a deal because it is nearly impossible to get buyers to compete for a property a second time so those who know will go with an offer that has no conditions with a lower price to get the deal done. Price is important but if you cannot close the deal than you have nothing — nada — nothing! Buyers are more informed, and realize if a property is worth it or not, and they will still go over the asking price but those who can close are those who get it sold!
Recently I worked with a group looking for an investment property who had to add in a condition on financing and we did not win the competition which is probably only the second time I have not won but everyone has limitations. If we did not have a condition I know for sure we would have won since the price was within our reach and the final sale price was lower than the property was worth. The moral of the story is to get all your ducks in a row before making an offer and you can still get properties at good prices if you can structure a good deal! V
           

Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca

This article can be found on