As soon as we have an offer on your property we will let you know and set up a meeting to review it with you promptly. We will explain the real estate offer process, review the terms and conditions, and represent your interest during the negotiations.
A firm offer is one that comes with no conditions. When your home is sold firm it demonstrates the buyer is 100% certain they want to buy your home and they have done their due diligence before submitting the offer. This is the most attractive type of offer because, barring unforeseen circumstances, the buyer cannot change their mind once you accept the offer.
A conditional offer is one that is contingent on the buyer conducting a home inspection and being satisfied with the results, getting financing or insurance, or even – but not likely – selling their home before proceeding with a firm deal.
This is the optimal position to be in as a seller in the offer process – receiving multiple offers at the same time for your property. Our track record shows that in 2018 we sold our listings for, on average, 105% of the list price as compared to Toronto Real Estate Board’s average of 99% AND our listings sold, on average, in 13 days as compared to Toronto Real Estate Board’s average of 26 days. We are masters at acquiring multiple offers on our listings and selling them during the optimal time.
Although this is the optimal position to be in as a seller, the real estate offer process must be handled with skill and precision to achieve the highest sale price possible. The buyers who have offered on your property are shrouded with anxiety awaiting your decision and anything can go wrong unless handled with sensitivity and precision which only comes with experience.
During the offer process, we will carefully vet all the offers presented and give you options as to how you can respond. You can accept one of the offers because you are satisfied with all the terms, you can counter only one and change the terms that are not acceptable to you or you can ask the buyers to improve their offer. This step of the real estate offer process must be treated with extreme caution because it can backfire and leave you with no offers at all.
A recent article in the Globe and Mail quoted a buyer participating in a bidding war, “The seller’s agent swore that offers would be a one-shot deal. Taking them at their word, we put in our best offer and had the high bid. Then, of course, they sent back for re-bids. We were surprised by the flexible ethics and walked away.”
The actions of this seller and listing agent during the offer process were not legally wrong, but it was ethically wrong and furthermore, it places the seller at tremendous risk. If all the buyers had walked away during negotiations, the seller would be left holding the bag. The likelihood of your agent being able to create another bidding war on your house is next to nil.
If you and your listing agent communicate to the bidders the procedure for offer presentation will be a one-shot deal, then it is critical you treat bidders with respect and follow through on your promise.
A situation arises, referred to as multiple representation, when the listing agent has a buyer that has submitted an offer on your property. This means the listing agent’s brokerage company is representing you, the seller, as well as the buyer in this transaction. This is something you and the buyer have to agree to in writing.
You may be asking yourself, “How can an agent represent me as a seller and the buyer at the same time? Isn’t this a conflict of interest?”.
Multiple representation is probably the most controversial aspect of buying and selling real estate. The Real Estate Council of Ontario (RECO) has guidelines and rules to help listing agents deal with multiple representation, but RECO has not enforced a standard procedure to deal with this situation. RECO is flooded with consumer complaints alleging unfair practises by real estate agents in this circumstance. Ultimately, it is up to the individual listing agent and their brokerage firm to formulate a procedure that is fair and communicate it to the seller and the buyer before offer presentation.
Multiple Representation and Multiple Offers
A more delicate situation arises when the listing agent has a buyer for your property along with other agents in a multiple offer situation.
If the listing agent has their own offer on your property, they stand to earn a much higher commission if they sell the house to their buyer. This would not tempt a reputable agent to act contrary to their client’s best interest, but it may a “fly by night” agent. How can you reassure yourself that your listing agent will work to get you the highest price possible from all interested buyers instead of focusing on selling it to their own client just to earn a higher commission?
First and foremost, you should ask your listing agent to share their procedure for handling the multiple offer situation when they have their own offer and communicate it to all buyer agents. Transparency is critical because it will set the tone for successful negotiations during the offer process. Many buyers feel the listing agent has an unfair advantage when the listing agent has their own offer so it’s important to assure buyers they will be treated fairly. Remember, the more buyers who come to the table, the higher the sale price. So if they are put off by the handling of the offer presentation process by your listing agent, they may not make an offer at all.
When we find ourselves in this situation, we strive to be fair and transparent during the real estate offer process and presentation. To ensure this, we set the following procedure in motion:
- We notify all buyer agents interested in making an offer that we have our own offer.
- We guarantee them a fair and transparent process.
- We set a time for all buyer agents to present their offer to you at our office or at your home.
- Josie will represent your interests during the offer presentation guided by industry rules for multiple representation.
- Valérie will present our buyer’s offer to you before any other agent presents their offer.
- Valérie will then leave the room.
- You and Josie will then proceed to review all the other offers one at a time.
If, after we vet all the offers, you decide to ask all buyers to make changes or improvements to their offer, Valérie will present her offer first, once again, before we see all the other offers. Our offer process is transparent, it’s fair, and it reassures agents and buyers that they will be treated fairly and with utmost professionalism.
The real estate industry is filled with reputable and professional agents we work with every day. Nevertheless, we have come across unscrupulous listing agents during the offer process who reviewed all other buyers offers first, increased their own buyer’s offer by just $1,000 more than the highest offer on the table, presented their offer from their buyer last, and had it accepted by the seller – all to earn a higher commission. Had they allowed fair competition to take its course, your house would most likely have sold for more money.
This leads us back to the importance of the agent’s reputation. An agent’s reputation is like wildfire – it spreads rapidly. Do your due diligence and ask your family, friends, and neighbours for referrals before you choose an agent to entrust with your most valued asset.
We work with many buyers and the likelihood of us obtaining our own offer on one of our listings is quite high. This is to your advantage because two offers on your property at one time will result in a much higher price than having just one.
When you list with us, the chances of having a multiple offer and getting top dollar for your property is high. Sometimes our buyers submit the offer with the best terms including the highest price and sometimes they don’t. Regardless, we are never swayed by the lure of higher commissions because we would never compromise our reputation – after all, only what’s in your best interest is in our best interest.
Get REALTORS® you can trust on your side during the real estate offer process – contact us.
Complete the form here or call us at 416-568-0001.