The real estate market isn’t what it used to be. Today’s buyers are more selective and budget-conscious than they’ve been in the past. As a result, a change in strategy can help you achieve the best results when selling your first house. Everything from your curb appeal to how well your listing is promoted online can make an impact. A finely-tuned process can mean the difference between obtaining outstanding results or not selling at all. What can you do to maximize your exposure and attract the highest number of qualified buyers? In many ways, a successful sale begins with your offer strategy.
Offers Are Not as Simple as They Seem
Offers seem like they should be a simple concept. A buyer likes your home, so they place a bid. But there is much more to selling a house than meets the eye. For one thing, there are different types of offers to be aware of. And the timing of when you begin reviewing offers can change. To a large extent, it depends on the market. Here are three scenarios to be aware of before crafting your strategy:
- A buyer’s market: This means there are more houses for sale than people looking to purchase them. You may have to compete against other homeowners in your area. A comprehensive marketing system is a must to generate offers from serious buyers. In addition, you’ll often review offers as soon as they come in to take advantage of any early interest in your home.
- A seller’s market: In this scenario, you hold all the cards. Buyers are searching for houses, but there aren’t enough listings to choose from. Holding off on reviewing offers can increase the interest in your home even more.
- A balanced market: The number of buyers and sellers is about even. However, certain cities and even neighbourhoods are more competitive than others. Your offer strategy will depend on the local market.
Why is it so critical to understand market conditions when formulating your strategy? The number of offers you receive isn’t that important in the grand scheme of things. It only takes the right one to make your sale an outstanding success. However, generating as much interest and as many offers as possible is often one of the best ways to sell your house for top dollar.
Understanding offers is just one aspect of a successful sale. Here are some other resources that can help:
- Best Practices for Selling a Home in Today’s Market
- Planning a Move? Is it Better to Buy First or Sell First?
- Can You Time the Market and Win Big?
Should You Set an Offer Date?
Depending on the market and location, you might want to make potential buyers wait before entertaining offers. Typically, a presentation date occurs after a house stays on the market for five to seven days. Your real estate agent might suggest setting your price slightly below market value to capture the maximum amount of attention.
When there is a lot of interest, this strategy raises the desire for your home to a fever pitch. But why make potential buyers wait? Under RECO (Real Estate Council of Ontario) rules, the listing agent must let anyone submitting an offer know how many others they’ve received. They can’t disclose any of the details. Still, knowing that there is competition can inspire potential buyers to offer higher amounts and better terms.
What Is a Bully Offer?
When you set a presentation date, you may receive bully offers, also known as pre-emptive offers. This happens when a buyer submits a bid before your designated date arrives. The idea is to beat the competition by presenting a compelling offer you’ll accept without waiting for your presentation date. Typically, a bully offer comes in at or above your asking price with no conditions.
If you decide to accept, the sale is over, and your house is off the market. You no longer have to worry about keeping your home show ready and can move on to the next step. The disadvantage of a bully offer is that you will never know if you could have received a better deal if you had waited.
However, there is no value in wondering “what if.” Whether or not to accept depends on the price and the terms. If you are happy with the agreement, you can count your sale as a success.
When to Review Offers Anytime
Holding off on offers can be an excellent strategy when the market is busy, and there is a lot of competition from buyers. During slow times, setting a presentation date can backfire if potential buyers lose interest and decide to look elsewhere.
If there is minimal competition, reviewing offers anytime can help you sell your house faster, which usually means earning more money from the sale. In this case, you agree to consider an offer as soon as it comes in. If you are happy with the terms, you can accept. Otherwise, you can counteroffer and put the ball back in the buyer’s court.
As always, starting with an optimal listing price right out of the gate is essential. When accepting offers anytime, your price should be more aligned with the true market value of your property. If you set the price too low, you may get some attention from buyers. But people will not likely bid over your asking price, especially if you’re not in competition. Undervaluing your property can mean selling it for less than it’s worth.
On the other hand, some homeowners are tempted to set the price too high. This is especially common on the heels of a hectic seller’s market that has suddenly dropped off. One month, your house is worth $1 million. The next, it’s worth $900,000. Nothing else has changed, except the buyers have moved to the sidelines.
Getting the price just right may not attract multiple offers, and that is okay as long as you find the right buyer at an amount and terms you are happy with.
What’s your next step after your home sells? Here are some ideas to start with:
- 5 Reasons to Make Guelph Your Next Home
- A Complete Guide to Real Estate Investing in Guelph
- Seven Reasons Why This Could Be Your Best Opportunity to Buy a Home in Guelph & the Tri-Cities
Should You Entertain a Conditional Offer?
One of the greatest things about selling in a busy market is rarely having to contend with conditional offers. The busier it gets, the harder buyers have to work to stand out. Submitting unconditional offers is one way to do it.
During slower markets, conditional offers become the norm. A condition is a clause in an offer that the seller must meet before the sale becomes binding. For example, a buyer might agree to purchase your home, but only if they can obtain sufficient financing. Or they may request a home inspection to ensure there are no potential problems before committing to the purchase. Placing a conditional offer allows buyers to protect their interests without missing out on a home they love.
As a seller, waiting to find out if the sale will close can be frustrating. If you have multiple offers to choose from, you can take the one with the fewest conditions or the highest price, and you may not have to contend with conditional offers. During a slower market, you may not have a choice.
Still, there is no reason to feel discouraged. A conditional offer shows that buyers are interested. They just want to ensure everything checks out before committing to such a massive purchase. Most of the time, the conditions are met, and you’re on to your next adventure! Regardless of the situation or the market, an experienced local real estate agent can help you negotiate for the best results.
Do you have questions about selling a house in Guelph, Cambridge, or Kitchener in the current market? We’ve been helping homeowners since 2006 and are happy to get you off to a great start! Reach out today at info@gowylde.ca or call 519-826-7109 to take the next step.
