No question that frustration levels are high these days. The market is still very hot and competition on offer night is as strong as it has ever been. They used to say that you had to make fifty significant real estate related conversations to get one deal. Today that adage has been tweaked to say that you need to make one hundred connections for the CHANCE to get a deal.
Part of my job as manager is to help agents figure out strategies on winning BEFORE they present. I decided to use this topic as a focus for my Tuesday meeting. Having lots of brains in the room allowed us to work together to come up with ideas on how to improve your chances. Frankly some of them seem very obvious but you would be surprised how often even the simplest idea can lead to victory.
There are the basic winning strategies. Have a well prepared and clean offer, include a large deposit in form of a bank draft, and have your client nearby. These three items should be enough to get you across the finish line. But there are some that may be less obvious. The truth is that it is not always the person with the biggest bag of money who gets the house. On the contrary. A solid offer, with better terms and conditions can beat a higher price more often than you think.
Like a good detective, its important to find out as much as you possibly can about who the seller is, how experienced is their agent, who are you competing with. The answers to this questions may help you in determining your strategy and potential offering price. Also it is important to present well. That means not just looking good, but making sure names are correctly spelled on the offer and that you have multiple copies for each seller even if the eventual offer will be signed digitally. It seems like a silly thing to do but before you head to the offer table ask the listing agent who you will be presenting to. If it is a family of five making decisions for an estate, bring enough copies for everyone in the room.
Ultimately the perfect presentation should include building rapport not just with the listing agent but with the seller. Being understanding yet firm with a sharp mind on the market and comparable sold properties in the neighbourhood will endure you as a professional.
Another helpful hint. After the offer is typed, find yourself a quiet room with no distractions and go over the entire offer line by line. There is nothing worse that wrong clauses, inclusions or names. Many years ago I received an offer on a property from an agent who was obviously in a rush. In an effort to save time, this agent cut and pasted clauses from another offer. When it arrived to me it had the wrong address and seller’s name on one of the schedules, the written deposit amount didn’t match the numeric amount nor did it match the amount on the cheque. Sloppy mistakes like that can cost you a deal very easily and there is nothing worse that having to go back to your buyer and explain why their higher offer was not accepted.
As I said earlier, these tips won’t guarantee you will win but they will increase your odds dramatically. Have any other tips that have worked for you? I would love to hear them. Drop me note.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office, the Immediate Past President the Toronto Real Estate Board and a director at the Ontario Real estate Association . The opinions expressed here do not reflect the opinions of TREB, OREA or Bosley RE
Given the scarcity of listings in the Toronto market these days its understandable that we touch on the topic of multiple offers from time to time. It’s probably because no two scenarios are ever the same but last week, at our weekly Mastermind session, the question turned the multiple offer topic around. When listing a property is there an optimum number of offers that our pricing should attract? We went around the room to get everyone’s opinion on the matter.
History dictates that we only need one good offer to sell a home so theoretically we should price the home to attract that one buyer. Unfortunately (or fortunately) the cards are stacked in favour of the Seller so even pricing fairly can lead to two or three or even four offers because there is just no sure way to predict how desperate a buyer might be but the question remains, do we try to price to get one offer or do we under price to attract multiple offers and hopefully push up the price for the buyer? (and if so, by how much?). If the choice is to under price to create excitement then how low do you go and how many offers are you hoping to attract? We had several opinions on the topic because pricing really is a moving target. The answers ranged from 2 to 10 offers.
There is a slippery slope to all this if you are a Seller, and I have written in the past about a seller who only got one offer on her property on offer night and was totally annoyed with the agent despite getting full price. The fact remains that underpricing can be dangerous. Sometimes we price a home thinking we have determined perfect market value and then we are hit with multiple offers. Sometimes we list under market value and get only one offer if at all, and then there are those cowboys who list hundreds of thousands under value and hope to generate 50 or 60 offers. But not getting an offer on offer night puts an agent on the defensive right away. The client is looking to you for answers. Where are all the offers? What’s wrong with my house? In this hot market why isn’t my house selling for over list price? Simply put, there are just too many variables to know for sure and it could be as simple as it’s raining or the buyers couldn’t get baby sitters.
So when it comes to the list price, know your competition and nail the market value. Under price just a little to create some interest but not a flood of buyers. Take the guesswork out of the listing and have the home inspection done well in advance.
In the end, everyone should know that it’s the Seller who determines the final list price but it is up to the agent to conduct an in-depth market evaluation and then determine the right strategy to get the Seller the most money.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.
If someone gave you $100k tax-free, what would you do? Go on a trip around the world? Buy a new car? Maybe quit your job and go back to school? Now let me ask you; what would you do if you lost $100k because your agent screwed up? If you are like most people you would probably start by screaming and pulling out your hair. Of course, I am talking about bully offers. This is the second time I have written about it. You can check out another article hear, http://bit.ly/yadRHu but this post talks about what happens when bully offers go bad.
Here is the story. The names have been changed to protect the guilty and I modified the price. Agent Liz lists a stunning home in downtown Toronto for $1.2m and decides, with the seller, to hold back offers. On the first day of the listing Agent Bob shows the house to his client who is absolutely in love with the home. Bob’s client lost out the night before on a $1.3m house that needed several hundred thousand dollars in renovation so when he saw Agent Liz’s house he figured he could go as high as 1.6m. He tells Agent Bob that he wants to bid high on the house and that he has been approved by his bank. Agent Bob calls Agent Liz and tells her that he will be coming to the table on offer night and asks that he be kept in the loop should anything develop before offer night. Agent Liz agrees. The next day, the house is reported sold by Agent Jay in a bully offer for $1.5m. Agent Bob is furious. He calls Agent Liz who tells him that there were too many people to call and the bully offer had a very tight irrevocable time.
Okay, now the house is sold firm, but sadly the damage is done. If she is smart, Agent Liz will do anything in her power to keep the news of the other offer quiet, but, if it got out what recourse would the seller have? Naturally he might launch a lawsuit against the agent and complain to The Real Estate Council of Ontario and in a worst case scenario, Agent Liz might be responsible for the difference between Agent Bob’s offer and the accepted price. Most likely however, she would be fined for not contacting any of the agents that had shown the property. In this case, there are two things to consider; first, the seller accepted the bully offer of his own free will. Second, it would be very difficult to prove that Agent Bob’s client would have actually bought Agent Liz’s listing for what he said he would pay. Remember, there is nothing as constant as change, and who is to say that on offer night, Agent Bob’s client simply changed his mind.
So, how do agents, on both sides, protect themselves? First of all, any listing agent should recognize that if you are going to be entertaining a bully offer you are under a greater responsibility to ensure you give everyone an opportunity to play the game. Missing one or two phone calls can cost you your commission. In a discussion about this event, one of the agents in my office said that she keeps an email log of every agent who has shown her listing so that if a bully offer appears she can send out a quick group email. In response to Agent Liz’s comment about the tight irrevocable time, she should have told Agent Jay that she needed more time to reach the seller and discuss their options. While Agent Jay might be a little irked at the delay it is important to recognize that he isn’t going away. His clients want the house. Agent Liz lost control of the situation. How could Agent Bob better protected himself? One simple move, have his client sign an offer right away and get it registered with the Agent Liz’s office. I have always been a proponent of registering quickly. Not only does it guarantee a seat at the negotiation table, it can scare away those buyers who don’t want to be in a bidding war.
The current market in Toronto is hyper competitive these days. With anywhere from 5 to 15 buyers for every listing, it is understandable that bully offers have found their way onto the real estate landscape. Knowing your role, on both sides, will minimize your risk to you and your client. As usual, I look forward to your views, comments and concerns. This post may not represent the views of Bosley Real Estate.