FIVE MULTIPLE OFFER TIPS FOR VANCOUVER REAL ESTATE
A seller’s market is defined by when there are more buyers than there are Vancouver properties for sale. This results in buyers competing in a multiple offer situation and sellers achieving a sale price that exceeds the list price. Sometimes the seller’s realtor will purposefully under list the home in order to achieve multiple offers and a fast sale. Multiple offers are defined as anything more than two.
Sellers’ realtors will normally not permit showings until the open houses on the weekend and then they have offer presentation on a Monday or Tuesday evening and the sellers realtor must disclose that there are multiple offers.
It is a very frustrating scenario for buyers and it creates a lot of anxiety as they often have to make a number of offers before they are eventually successful.
Tips for Vancouver real estate buyers to win in a multiple offer situation
First, if you are not a cash buyer then you will have a pre-approved mortgage. Contact your bank or mortgage broker and ask them to approve the property you wish to purchase so that you can make an offer without a subject to financing clause.
Second, ask your realtor to obtain all the strata documents so that you can read and approve them. This includes the Property Disclosure Statement, title search, strata plan, depreciation and engineers reports – if any, minutes of strata meetings for last 24 months and form b
Third, buyers are advised to have a building inspection prior to purchasing . You will have to do this before making the offer. Many condo buildings now have Depreciation Reports, which are included in the strata documents and some buyers are satisfied reviewing the Report and not having a building inspection.
If you carry out your due diligence prior to writing a contract of purchase and sale, you can then make a non -subject offer.
Fourth find out what the seller’s plan is and structure your offer to accommodate their plan.
Fifth make an above average deposit to accompany your offer, rather than having it available after the offer is accepted. It must only be a bank draft.
What’s Important to the Seller?
In a multiple offer situation sellers will consider four items in order to decide which offer to accept – the price, the number of subject clauses and the subject removal dates, the closing date, the amount of the deposit and when it is due. Human nature being what it is, the highest price usually wins but sellers may select the offer with no subjects even if it is not the highest offer.
In particular circumstances – maybe they have been transferred to another city and have to be there to start their job on a specific date – the date is of utmost importance. Or, the seller may have a special need which is more important than the price –perhaps they wish a longer closing or may wish to close quickly and rent back from the buyer for a few months.
How to offer the right price? Unlike a buyer’s market, it is difficult to establish a current value for a property because the prices are rising by the month so recent sales are no longer comparable. It really is a case of throwing the dice and paying the very most that you can.
Who Gets to View the Offers?
Only the Seller and their Realtor are permitted to view the offers. Basically it is a crap shoot as you have no idea what the competition is offering.
On occasions where none of the offers are acceptable to the seller, then the seller will counter the highest offer and if that buyer does not accept the seller’s counter, they will then counter the next highest offer. The seller is not obligated to accept any of the offers if they are all below the list price. Maybe the Vancouver property is priced above the current market value.
If the seller accepts one offer and it has a one or two day subject clause (finalization of bank appraisal), the seller may also counter another offer, at the same price as the one accepted, and if the buyer accepts the counter then they are in back up position, should the first one not remove their subject clause.
What are your options? Sometimes a seller’s demands will be completely unreasonable and you may be better advised to throw in the towel. Howevver, when a specific property sells it will establish the market value for the next seller in the building, so waiting for the next listing will not help you as a buyer because the prices are rising.
You could wait out the market because all good things eventually come to an end but how much more expensive will it be by the time this happens?