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The media likes to focus on the craziest of crazy bidding wars: “One-bedroom condo gets 20 offers!!” “This house went for $754,000 over asking!”
While those situations do happen, they aren’t the norm – that’s why they made the news! In February 2022, the average home sold for 114% of the asking price…that’s a LOT of bidding wars. But it doesn’t mean that EVERY home gets multiple offers.
Let’s Back Up a Minute…
In a hot real estate market, Sellers who are trying to maximize their sale price will often attempt to draw in multiple Buyers at the same time, in the hopes that the competition will drive up the price of their home and it’ll sell for more than what they think it’s worth. A common way to do this is to underprice a home and set an offer date, usually 6-8 days from the listing date. The hope is that more people will have a chance to see it and fall in love, and they’ll all throw bags of money at the Sellers.
BUT…it doesn’t always work.
Sometimes, offer night arrives and there are NO OFFERS.
So what do you do?
First, the good news:
- You never have to accept an offer you aren’t satisfied with. Never.
- Just because you listed your home at $999K (even though you and your agent think it’s worth $1.2 million), there’s nothing preventing you from re-listing your home for sale at a higher price that you’re willing to accept.
- Don’t worry that agents will wonder why you listed your home for $1.2 when it didn’t sell at 999K and think you’re crazy – they’ll be able to see that you had an offer date and will know that 999K is not a price you were ever willing to accept. This happens all the time. (Note: If you repeatedly change your pricing strategy and remain on the market for months, your listing history might hurt you, but a price increase after a failed offer night is something agents and their Buyers understand.)
Why? Why me?
If you didn’t get any offers on offer night, you’ll need to examine what happened.
- Was it something out of your control that messed with your plan?A week of terrible weather ? Your next door neighbour listing their superior home at the same time as you? Your tenant refusing to let potential Buyers see the property?
- Did you have the wrong pricing strategy or valuation? Was your property staged and ready to show or could you have done more? Were the photos and marketing copy enticing? Was the property well marketed beyond the MLS? Was it easy for potential Buyers to book showings?
- How many showings did you have? What was the feedback? Was anybody planning on bringing an offer and then backed out? If yes, why?
- What happened to the other homes like yours that were for sale at the same time as you? Did they sell on their offer nights or experience the same disappointment as you?
Depending on WHY you didn’t get offers on offer night, you have a few options:
- Increase your price. Sure, some Buyers may be weirded out by seeing a price INCREASE vs a DECREASE, but it happens.
- Terminate your listing on the MLS and re-list it at a price you’re wiling to accept. Look at offers anytime. This has the advantage of helping you appear like a ‘new’ listing, but active and motivated buyers won’t reallky be fooled.
- Keep your home on the market at the lower price and set another bidding war date. This strategy only really works when the reason you didn’t get offers is related to something like bad weather and affected all the nearby Sellers in the same way.
- Reconsider your strategy and take your home off the market while you make adjustments. You may need to paint or stage your home; you may need to have a heart-to-heart talk with your REALTOR about how they marketed your home or you may need to start over with a new REALTOR.
The right strategy for moving on after a failed bidding war with no offers will be unique to you and your situation, but a great agent will help you prepare for this BEFORE offer night – and help you get through the emotional roller coaster.
But remember: You aren’t alone – this happens more than you’d imagine. And you aren’t stuck and have options.
Homer Simpson says:
Market sentiment and buyer psychology has already started to shift. Already seeing downward price declines in the detached segment (single family homes) in the 905 like Vaughan.
Bond yields are at an all time high and have put the the market on notice. Prices are going to come down precipitously to meet the new borrowing capacity limits with the interest rate hikes that are coming. It’s also delusional to expect prices to continue to rise the way they have. Prices are already stalling in the setting of rising rates the psychology of the market will change very quickly. April 13 interest hike announcement and it’s gonna be downhill from there (if not already). The party is over. Time for the sellers to start sweating like the buyers when prices were reaching unjustified and ridiculous levels.
Brendan Powell says:
Despite having left a fake name and email, I thought it still valuable to approve this comment. While some of the observations are true, it’s important to note that the conclusions drawn are nothing new…in fact dire predictions for the Toronto market have been an almost annual sport in the media for decades! I saved a series of front page magazine articles predicting the implosion of the real estate market going back 10 or 15 years. The Greater Fool has been doing it for 30.
While it’s important to always be watchful of dangers and not to be reckless, it’s just as dangerous to bank on a perceived impending doomsday as it is to assume that prices will always go up. Melanie’s first townhouse was bought 20 years ago from someone who declared that the market was about to implode, and that prices would never be sustainable at $300,000 for a 3 bed townhouse.
Ten years later we saw the same thing, with some smug doomsday sellers thrilled they were getting out of the market since they were convinced “the party was over” then as well. Both these people are now permanently out of the market and likely will never be able to buy due to their conviction that price declines were imminent.
If you predict the same thing long enough, eventually you may be right…but that doesn’t mean you have some special wisdom—even a broken clock is right twice a day. Do what is right for your own life, don’t try to time the market, buy within your means and always have a buffer or backup plan.
The only really true prediction…is that nobody actually knows!