Your Simplified Guide to Rules and Best Practices
Selling your home in Simcoe County?
With the housing market slowing in response to rising interest rates, you might be wondering whether bidding wars are still a “thing”. In some hot markets, you might still see multiple offers while housing supply is low. Desirable properties could find themselves in situations where interest remains high on their home.
While we’re not seeing the same level of extremely low list prices with insanely high selling prices, a successful listing strategy could still involve pricing your house below market value in hopes to drum up interest and possibly entertain multiple offers.
Regardless of the market, here are some things you MUST know before ever considering this strategy.
The Pros and Cons of Delaying the Offer Presentation
PROS
Pricing on the lower end of the range could generate increased interest
This may lead to competing offers and a desirable selling price
CONS
You risk missing out on an appealing offer if a buyer doesn’t want to wait until the offer date
If there are no offers on offer date, buyers may see the property as less desirable or wonder if it’s overpriced
Pre-Emptive Offers (or “Bully” offers)
You’ll also need to carefully consider how you’d like to handle pre-emptive, or “Bully” offers and document it in writing before listing your property. This is when a potential buyer wishes to avoid the established offer process.
At the outset, you will need to decide whether entertain pre-emptive offers, or ask your Realtor to hold all offers until offer date.
Consider these points before deciding….
There’s no right or wrong answer, but the below list will help you determine which strategy aligns best for you:
How would you feel if a pre-emptive offer came in and you weren’t told about it?
How much information do you want about pre-emptive offers that come in?
Do you want to be notified of a pre-emptive offer without seeing the details?
Do you want to see all details but not formally consider any offer until the presentation date?
Would you prefer not to be informed about any pre-emptive offers at all?
Do you want to consider all offers before the presentation date?
Do you want to formally consider only offers above a certain price, or ones that contain a specific condition (i.e. no financing or no inspection conditions etc.)?
Discuss all options with your Realtor and make sure you understand the implications
No question is a dumb question! If anything is unclear, book a chat with your realtor and make sure you go through every one of the points to decide what strategy you like best.
Once you’ve decided, your Realtor will ask you to sign a form that confirms your written instructions regarding pre-emptive offers.
Make sure there is no “grey” area during the process as it could get you into a stressful situation if your intentions aren’t clear. It’s also extremely important to make these important decisions before going on the market because it helps you think with a clear mind, preventing emotions from taking over once the ball is rolling.
Of course, you are entitled to change your mind during the process, but be sure to document this in writing if your strategy changes half way.
What if a Bully offer comes in and You’ve opted NOT to review them?
Realtors are obligated to convey all written offers to a seller at the earliest opportunity providing no written instructions on pre-emptive offers exists.
If your written directions have specified NOT to be notified of bully offers, then your Realtor is obligated to follow your instructions. You need to be crystal clear on how you wish to handle pre-emptive offers, and make sure those instructions are conveyed on your MLS listing.
If you have chosen to review pre-emptive offers, be sure that your agent notifies all other agents that have shown the property have been notified as soon as the offer comes in.
This will give them an opportunity to bring forward their own offer as well.
Now that you know the key points to navigating bully offers, you’ll be well equipped to decide what strategy is right for you!
Written by: Deanna Allegranza
For further reading on this topic, visit RECO: https://www.reco.on.ca/registrars-bulletin/managing-pre-emptive-offers/
