One Toronto couple recently spotted a four-bedroom, Tudor-style house listed for sale on Summerhill Avenue and knew immediately that they wanted to buy it.
They met with their agent, Robin Pope of Brad J. Lamb Realty, and discussed strategies for tabling an offer on the designated evening. Mr. Pope figured that the house with an asking price around the $1.5-million mark might attract rival bidders.
So he took a gamble and attempted to repel them.
First thing on Monday morning, he registered an offer – even though the deadline wasn’t until 5 p.m. the following day. Even the sellers’ agent was taken aback. She called to make sure he hadn’t got the date wrong. But Mr. Pope assured her there was no mistake.
By Tuesday evening, no other offers were registered and his clients stood alone with their bid of $75,000 less than the asking price. The sellers negotiated for a little more and the buyers agreed.
“It worked,” says Mr. Pope, still sounding slightly shocked that the gambit paid off.
Mr. Pope says the erratic market this spring has given buyers more bargaining power than they’ve had in the past several years.
Many house hunters are refusing to join the fray when multiple offers are being tossed around.
It means that agents are shifting their strategies as well. Mr. Pope says he is exercising negotiating skills he hasn’t had a chance to use in years.
“I’m actually enjoying it,” he says, while acknowledging that he feels compassion for the homeowners who didn’t get the multiple offers they were likely hoping for.
Still, he has to represent his clients’ interests, he says.
“My buyers were elated that they got the house.”
For several years, bidding wars were so omnipresent that buyers would pull out all the stops in order to prevail. Usually that meant holding off on registering an offer until about five minutes before the deadline.
“In the past they would wait until the very last minute otherwise the listing agent would use your offer to coerce another agent to get an offer on paper.”
But his research showed that in recent sales in that area in that price range, only one in three went above the asking price, says Mr. Pope. So it appears offers are being signed back and forth – with numbers scratched out and new numbers inserted until a deal is reached.
“That used to be the normal course of business – for decades,” he says.
Kurt Diener of ReMax Condos Plus had a quirky deal come together after a loft he had listed with an asking price of $2.499-million sat on the market for three months.
Five potential buyers were interested, says Mr. Diener, but not one was ready to make a decision. The market was so slow at the time that Mr. Diener decamped to West Palm Beach, Fla., where he also holds a license to sell real estate.
The loft was featured as a home of the week in Globe Real Estate and that article drew the eye of a new potential buyer who quickly made an offer.
Mr. Diener got in touch with the other parties who had signalled interest and one hastily put together a bid.
But the first bidder came back with a second bid and won out with an offer $140,000 above the asking price.
Mr. Pope says that even in this more balanced market it’s not uncommon to see buyers hesitate over a property until they know there are other contenders.
“People have gotten used to buying what everyone else wants. There’s so much psychology to selling real estate.”