Multiple Offers: Sometimes You Build It and They Don’t Come

In the J. P. Kinsella novel Shoeless Joe a man must build a baseball field in an Iowa corn field and then kidnap the author J.D Salinger in order to make the statement “If you build it he will come” be a reality. This also is true with multiple offers.   If does not happen by saying it, it only occurs if you build it correctly.

Most of us know that saying Toronto’s real estate market is incredibly hot is an under statement.  Here’s the new normal in our present housing market: Every home owner sets a date when they will consider offers, and on that day dozens of buyers line up willing to throw buckets of cash in the hope of winning the night.  And for the last year that has been the world my buyers and I have been living.

However, every so often when moon is holding water and the stars align a strange and rather singular occurrence manifests itself…a seller gets no offers on their presentation date.  It’s rare sighting in my world, but there is reason of why this seller did not attract a single offer.

I know of what I speak, as I sold on this Toronto east end street last December.  I had a listing and of course we held back offers on the property, which attracted 10 offers and we got $115,000 over asking for a two bedroom brick bungalow. To get this was not by happenstance, but by clear and decisive strategy.

Here is a shot of the street.

Toronto east end street

So three weeks ago a house was listed on this same street.   The listing agent priced it as fair market value and held back looking at offers for a week.  I am sure the agent informed that sellers “we will just sit back and on offer night  buyers will  flocking to hand over buckets of cash”.

Well presentation night arrived and no one came to the table. No mob of clamoring buyers and no buckets of cash.  Our Toronto housing market spoke and those buyers who looked at the property came to the collective conclusion it was not worth the seller’s evaluation.

Now with sales you know that if you don’t sell you leave it at the same price and see if you can attract a single buyer who might be willing to negotiate with the seller…old school one on one negotiations which I do miss.

However this was not to be the case. They had come up with an alternate strategy, one which might sell houses on another planet but not here in Toronto.  Since no one came at the present list price their new tactic was to increase the selling price by 10%.  So let me get my head around this?  You got no offers at your old price and now it is valued at 10% more than a week ago.  Okay, lets see how that plays out.

I have a good idea of why the seller and the agent thought they could get multiple offers and why their price was unattainable.

At the start of this blog I did mentioned that I had sold on the street in December.   To be more accurate on the opposite side of street facing this home, and as I said we had 10 offers and got $115,000 over asking.

The error in the logic here is the present seller and their agent believe their property and the one I sold are comparable.  The reality is they are not.

Both of 2 bedroom bungalows and are situated on the same size lot but they have one big difference. The house I sold backed onto a ravine, which this unique feature was a key selling point.

If you stood in the middle of the street you would see on one side many of the original bungalows, however on the opposite side many of those same homes have either been torn down and replaced with a larger home or a full second floor addition has been added.

What some sellers and their agents fail to grasp is that it’s not a given where multiple offers become the expected in Toronto’s housing market.  In this instance the over evaluated price and location are not enough to warrant sufficient interest to buyers.

Build it and they will come.  Well in this listing they had no strategy and their  anticipated over asking and multiple buyers was based on unrealistic data.