Encouraging Multiple Offers
Pricing, Preparation, Timing ...and a little Luck.The real estate market in Metro Vancouver is a fickle beast. Every day, we see conflicting opinions in the news specifically designed to get us all talking at the water cooler about what’s going to happen with real estate prices. Some people will tell you it’s a bubble ready to pop, others will say prices are going to continue to soar. Of course it's impossible to predict it for sure because there's too many other factors in play. If we could eliminate those factors and leave the market alone to do its thing with no external influences then we would probably see modest annual gains of maybe 1-2% in home prices year over year.
But that's not reality is it? The market is never left alone. Pressures like increases in immigration numbers, limited supply of new housing, and increased costs to developers will drive up prices. Conversely, introducing more taxes on real estate transactions, over-developing, and further tightening mortgage regulations are likely to have a negative effect. Now, throw in the media, the economy and even the weather in to the mix and imagine how that changes things. Ugh.
Understanding markets is a science. The more you understand, the better chance you'll have of capitalizing on it. It's the only way to beat the system because nobody is ever going to control the market on their own, unless they're a wealthy policy maker, rubbing shoulders with Ottawa’s elite (like Bill Morneau), or an overly ambitious Premier, hell bent on getting re-elected (like Christy Clark). Even then, the meddling they do to the real estate market usually has consequences beyond the original desired effect. One thing you can do, however, is create a stronger demand for your listing over that of your competition. Creating demand is a fundamental part of my business and a solid marketing strategy is crucial if you want to get multiple offers.
First, you should price your property accurately. If its too high, buyers will not show much interest, that part should be obvious. It also needs to be stressed that the tactic of starting with a slightly higher price (just for a while, to see if you get any takers) is not going to work so please don't do it. You're not fishing and buyers are smarter than that. They also have memories so you've pretty much lost them for good. You'll never get a second chance to make a good first impression.
Now comes the groundwork. Prepare your property to show at its best. Remove clutter and hire a cleaner to get into the nooks and crannies of your property and make it shine. Consulting with a professional stager is always a good idea and hiring an accomplished photographer will make sure the property shows well in online photos, which is an increasingly important part of creating demand. I always discuss these steps with my client and this is a big part of the marketing strategy that I put together for them.
Next, you need to have at the ready all pertinent information ready for potential buyers. Having all your ducks in a row is critical to getting the best offer in. If you were selling a strata property, you’d want to have all the documents available. Both of these are designed to take away any questions the potential buyer has, so they are comfortable putting in an offer without conditions.
Then, it’s time to list your property on the M.L.S. but, and timing is crucial here, give at least a couple days before the first open house and specify a date after that to examine the offers. Some buyers don’t check the new listings every day so give them a little time to see your listing online and make sure you have incredible photos and a virtual tour to back up a host of advertising initiatives that your realtor promotes for you.
This is where a good agent shines. Having a solid marketing plan in place is of ultimate importance to generate maximum interest and your realtor should be immediately leveraging print media, social media, and canvassing your neighbourhood or building to generate extra interest. There is nothing people like more than talking about real estate, especially when it pertains to the value of their own property. Talk to the neighbours, let them know there is a listing for sale and an open house coming up, most will want to come by and take a look.
Now comes the open house. You’ll want to vacate the property so your agent can show it and promote it to visitors. If you think it will be okay to just hang out in the garage or in the backyard, it’s not. Your presence on the property during an open house is always a bad idea. Open houses will usually be during a two-hour time frame, but this isn’t set in stone.
After the open house, allow potential buyers a day or two to inspect the premises, in case they want to do that before making an offer. As with the open house, it’s a good idea to keep this confined to a specific time period. Busy activity on your listing is foremost on the buyer’s mind and increases the competitive atmosphere. If you are selling a strata unit, use this time to make sure all of the potential buyers have a chance to look at all of the strata documents.
The realtor should be calling all the interested parties to make it known that you are looking for an offer without conditions. And of course, you can always accept an offer with conditions if you feel the price and terms are in your favour.
Right from the beginning , you and your realtor should have specified a time to have the offers come in from all the interested parties. This is where things can get testy so having a seasoned negotiator working on your behalf goes a long way. There will always be buyers looking to put in an early offer to thwart your marketing plan so your realtor needs to be on the ball during this time. Now its time to go through the offers and see which one has the best terms for you and your family. Don’t forget that all the terms need to be considered, It’s not just about price. Discuss these terms with your realtor and make a decision. Then choose a backup offer in case anything goes sideways with the first one. By having a backup in place and communicating that fact to the buyers of the first offer you have both underscored the urgency of completing the first deal and stated that you're not willing to negotiate further.