Mark Weisleder – Toronto Star

Recently, the sell­ers of a home in The Beach listed their home for sale with a rep­utable agent. They were aware that buy­ers were start­ing to shy away from mul­ti­ple offers as a result of a col­lec­tive dis­ap­point­ment in the entire mul­ti­ple offer process.

One com­plaint was that there were sus­pi­cions that the list­ing sales­peo­ple were pro­vid­ing unfair advan­tages to their own buy­ers, from whom they could obtain a higher commission.

Another com­plaint was around the prac­tice of list­ing a prop­erty, but indi­cat­ing that no offers would be accepted for five days, in order to per­mit inter­ested buy­ers to con­duct inspec­tions before sub­mit­ting offers. Sell­ers hope that this will cre­ate an atmos­phere for mul­ti­ple offers. How­ever, there were exam­ples where buy­ers would bring in pre-emptive offers before the five day period, and sell­ers were in some cases accept­ing them.

The agent in this case sug­gested a novel mar­ket­ing approach. The prop­erty list­ing indi­cated that offers would not be accepted for six days and that the ask­ing price would be $539,000. The house was priced, after a care­ful review of com­pa­ra­ble prices in the neigh­bour­hood, and the sell­ers hoped that with mul­ti­ple offers, they might obtain $550,000 to $560,000. The real­tor asked them what their “dream price” would be and they indi­cated $590,000.

Accord­ingly, the real­tor included a note on the list­ing that sim­ply stated “Buy tonight, $590,000″ and on her “For Sale” sign invited buy­ers to call for the “buy tonight price.” This appears sim­i­lar to how prod­ucts are sold on eBay, where the con­sumer is given the choice to either bid on the item in the online auc­tion or decide to “buy now” at a set price.

In my opin­ion, the adver­tise­ment of a buy tonight price would prob­a­bly not be enforce­able by a buyer, even if an offer came in at that price. It could be argued that this was still an “invi­ta­tion to treat” by the seller, thus not bind­ing. The Statute of Frauds in Ontario requires that all real estate agree­ments be in writ­ing and signed by the par­ties. In addi­tion, no other terms were men­tioned in the adver­tise­ment, so if a buyer brought in a full price offer, but with a clos­ing date two years from now, and with a very low deposit, this would clearly not be what the seller had intended. In addi­tion, what would occur if two buy­ers came with sim­i­lar offers on the same evening?

Still, a buyer did come in and pre­sented an offer of $590,000, which was accepted by the sell­ers. The buy­ers were very happy to avoid the mul­ti­ple offer process and the sell­ers were very happy to obtain their price.

The mul­ti­ple offer process is not easy. You require an expe­ri­enced real estate sales­per­son to guide you through the process.

For a seller, it means under­stand­ing not only the prices that other prop­er­ties have sold for, but also what the mood or pulse of the mar­ket is at that exact point in time, so that a strate­gic mar­ket­ing plan can be put into place to obtain the max­i­mum price.

For a buyer, it mean under­stand­ing what the fair mar­ket value of the home is and not get­ting caught up in the emo­tion of the bid­ding process, to ensure that you only spend what you can afford.

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Con­tact the Jef­frey Team for more infor­ma­tion  -  416−388−1960

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