Last week will go down as one of my craziest real estate weeks EVER. I participated in 5 offers, sold 4 places and listed a great house in Roncesvalles. Along the way, I saw Buyers and Sellers use great strategies to get what they want, and well, some questionable strategies that didn’t work. Here are some important lessons for Toronto home Buyers and Sellers:
1. If you’re going to make an offer on a property that’s only been listed for a few days, make it a good offer. It’s not the time to low-ball. Assuming the property has been properly priced, coming in significantly under asking just isn’t going to work. If you’re looking to score the house of your dreams in the first few days after it’s listed (and trying to avoid a bidding war), come to the table with a good offer or be prepared to be sent away.
2. If you’re going to participate in a bidding war, participate! I can tell you right now that you aren’t likely to win with an offer below asking and one with a million conditions. Read about How to Win a Bidding War and play the multiple offer game, or be prepared for continuous disappointment. And go in with your strongest offer – twice this week, I’ve seen Buyers try to increase their offer prices after another offer was accepted – and by then, it’s just too late.
3. The time that your offer expires (irrevocable time) is an important part of the negotiation and I’ve seen it brilliantly used this week. Putting some time pressure on the other side can help you get the house you want.
4. If you’ve just lost your tenth bidding war, something’s not right. You’re either looking at houses you can’t afford (the asking price is irrelevant in this market) or you’re getting bad advice from your real estate agent. Change what you’re doing.
5. If you’re working with an agent and go to an open house on your own, tell the listing agent! You’ll be less likely to get emails from them and they won’t ask you questions that will put you in a worse negotiating position. Revealing your cards to the other side is never a good idea.
6. If you’re working with an agent, you should schedule showings through them, not directly and privately with the listing agent. Now I’m happy to show my Sellers’ properties to anyone – but remember that I work for the Sellers, not you. And to be honest, it’d kind of weird – if you have hired someone to represent you, don’t you want their opinion?
7. I’ve had the pleasure of working with some amazing real estate agents this week. Make sure your REALTOR is great (and that they’re making the effort to be on good terms with the opposing REALTOR – antagonism is never going to work).
8. Once again this February, I want to sell my house. It’s not actually because I want to move, but because there are way more Buyers out there than Sellers. The 10 person+ bidding wars are back and part of me wants to get in on the action. If you’re thinking of selling (especially a house or a loft), stop thinking and get on it.
Doug Francis says:
These are some really smart insights into proper negotiating strategy in a competitive market. Sometimes a seller can make a decision based on a total “x-factor”, but, today’s home buyers need to head into competitive situations with a top end price already in mind.