Multiple offer misconceptions: Why buyers shouldn’t fear the current housing market
The current housing market in Greater Victoria isn’t showing any sign of cooling off as we head further into 2021. Inventory remains low and there continues to be pent-up demand.
What does that mean for buyers? Multiple offers are common, but don’t have to be feared.
We often hear stories of ‘bidding wars’ when houses sell for well above the asking price. The term ‘bidding war’ itself is intimidating, and in my experience, misleading. If you’re a prospective buyer who feels purchasing a home in this market is daunting, or even near impossible, I’m here to tell you it doesn’t have to be that way.
Common misconceptions I hear about multiple offer scenarios include:
The accepted offer is always above the asking price.
The accepted offer is always above the market value of the home.
Buyers keep battling it out until the last buyer stands for the highest bid.
So if those aren’t the case, how do multiple offers really work?
Here are three things to consider:
You never know whether you’ll have competition: In this market, your offer could be one of 20, or the only one. Some offers may be really high or simply hover around the asking price. When working with buyers on a home they love, I like to recommend they offer an amount that if they don’t get the home, they won’t regret not bidding higher. That way, if the home goes to someone who offered more money, then they have the peace of mind that it wasn’t meant to be, as they weren’t prepared to pay that anyway.
Fear of multiple offers may mean no offers: If sellers delay offers (meaning they wait to look at all of the offers at once, after an open house for example), it doesn’t always result in multiple offers or interested buyers. I’ve seen cases where the listing agent hears buyers simply don’t want to compete, and no offers are made. Prospective buyers then miss their opportunity to make a strong offer with no competition.
Multiple offers can be a sign of a great property. A positive side of multiple offers is it helps instil confidence that you’re bidding on a worthy home. Demand follows desire, so it can help to disconnect from the bids and think about the true value of your offer, how it fits within your own circumstances, and position it appropriately where you are a winner either way.
Buying in a hot market can be daunting, but it doesn’t mean you can’t purchase with a reasonable offer, no matter the other offers at hand. With perseverance and the right information, you can still get the home of your dreams.