Waiting For Multiple Offers a Risky Strategy – Zoomer

Multiple Offers Can Be Risky - Zoomer

Multiple Offers Can Be Risky – Zoomer

What’s Up With Multiple Offers

 

Listening to Canadian media outlets you’d conclude that home sellers from Corner Brook to Chilliwack  are all attracting dozens of offers from  buyers willing to pay sky high prices to secure their dream home.   If only that were true.  The reality is that multiple offers is, for the most part, almost completely isolated to our largest metropolitan centres.

What has emerge from this frenzied selling environment is that sellers have come to the conclusion the merely listing their property will generate a multiple offer scenario.  They believe two tactics will deliver the desired results:

  1. Slightly undervaluing a home’s true market price, therefore positioning the property as a bargain
  2. Holding back considering offers for a short period of time, which increases the window for potential buyers to view the house

This is not a strategy for success.  Most sellers who consider this their marketing plan will be very disappointed when their home fails to achieve multiple offers and then will be left questioning, Why didn’t it happen?   The primary reason it failed was they did not specifically identify the type of buyers who would be attracted to their home.  It seems simple to determine who will be attracted to a house: first time buyers, fits growing family,  empty nesters downsizing, etc.  This isn’t good enough.  To successfully determine if your home will be a candidate for multiple offers, you have to drill down to the specific demographic who are actively searching for a home and are there significant numbers.

Consider this example, say you have a 3 bedroom home, located in a desired family neighbourhood, newly renovated,  and have priced it similarly to a home which was recently listed attracting eight buyer offers and sold well over asking price just a couple blocks away.   After one week on the market  no offers. After two weeks, still no offer and after three long and agonizing weeks  the home  finally sells for $5,000 less than asking price.  Where’s the disconnect?   The reason the first house was in the catch area for a desired school, while the former was associated with what buyers perceive as a mediocre school.  Again, it doesn’t have to be a school, other key considerations could be location, home style, proximity to desired venue or house condition.

But let’s say that both homes are  identical and they share the same desired school.  Again, the first home garners 8 offers and sells for well over asking price.  Again, this time the second home suffers the same outcome;  no multiple offers and sells less than asking price.   Why?  Remember those seven unsuccessful buyers from the previous sale.  Having faced disappointment from the first house sale, they collectively decide to sit it out as they have no intention to participate once again in multiple offers.   When the second house didn’t sell in the first week,  these same 7 buyers now begin to question. Why didn’t it sell?  What’s wrong with it?  Timing the market is the critical factor here and it impacted on their selling price.

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