Does a Seller Have to Sell Their Property on Offer Night?
There are still buyers out there who believe that a seller has to "take whatever they get" on offer night. That's simply not the case.
I still remember the last time I went trick-or-treating...kinda. I know I was in high school and any parent who answered the door to me and my high school friends (none of whom were dressed up as anything, myself included) would give us the stink-eye, loudly sigh, and toss over a couple pieces of candy just get us off their porch. I still feel pretty sad that it would be the last time I'd get to walk up to a stranger's house and get bags full of free candy.
I also remember being an appropriately-aged kid, getting home after a monster trick-or-treating haul and separating all my candy into "awesome", "ok", and "not gonna eat them" piles. Kit-Kat, Coffee Crisp, Nerds, M&M's, Snickers, Skittles...those were all in the awesome pile for sure. Tootsie Rolls, Smarties, Twizzlers...those were just ok. And things like Good & Plenty or black licorice Twizzlers - those would stay in the pantry all year.
I guess since it's Halloween I'm supposed to reminisce about stuff like this because as a 39-year-old with no kids, Halloween just doesn't mean much to me anymore. But I'm still jealous of all that free candy being passed around tonight ;)
Now back to real estate!
Not long ago I was working with awesome clients who were tired of renting and were ready to buy a downtown condo immediately. Pre-approved for a very healthy amount, they knew exactly the neighbourhoods they wanted to be in and the only make-or-break requirement was "decent" space with lots of light. We hit the search immediately and after seeing 4 or 5 places and settling on one they really liked, mom was brought into the picture.
On a side note - I'm always a little weary when parents are brought into a house-hunt late in the game. There's nothing more deflating than finding a place your client absolutely loves, only to have mom or dad come in at the last minute to check it out and say "they want $600,000 for this?? I'd never pay more than $450,000". That's a tough objection to overcome. Eventually though, after mom or dad get a little more involved (and informed) and see how active and expensive the Toronto market really is, they come around and usually let me do my job.
In any event, mom in this case was fully supportive and thankfully trusted that I knew what I was doing. As we were leaving one awesome unit, listed for $599k with an offer date, mom said something that made me realize how important professional and experienced representation is for buyers.
I started to explain how an "offer night" scenario works, the way our offer should be structured with no conditions, deposit in hand, etc and how the seller will then either choose the best offer or "send certain buyers back" to improve their offers to try and get a higher price. I usually end this type of explanation with "and if the seller doesn't get the number they were hoping for on offer night..." when mom interrupted and tried to finish my thought with "the seller has to take whatever they get that night and sell the place".
I paused for a second, thought about the most polite way to say "that's incorrect" and finally said "actually, that's a huge misconception about offer nights. The seller doesn't have to sell even if all the offers are over asking. If they don't get what they think the place is worth, they'll take the unit off the market and more than likely relist at what they feel is market value, and accept offers at any time."
Mom paused for a minute and I could see what was going through her mind...Why wouldn't they have to sell it on offer night? I mean, it's an offer night, and they got offers, so they have to sell, right? Toronto real estate works a little differently than common sense might have you believe.
Imagine walking into The Gap seeing a pair of jeans for $79.99, walking up to the cashier trying to buy said jeans, when the cashier says "actually, we're not selling those jeans until next Tuesday". (By the way, I love Gap jeans so they get a spot in my blog ;)
So you come back on Tuesday, see the jeans still on sale for $79.99, walking back up the cashier to buy them only to hear her say "actually, we want more than $79.99 because those two people over there also want the same pair".
Now imagine if you really, really wanted those jeans and you figured they were worth more than $79.99 to you so you decide to offer $85, only to have one of the other guys want them even more and offer the cashier $90. That would suck but hey, he wanted them more than you did, so he should get them, right?
Now, imagine that the cashier says to you both "thanks guys but I really wanted $100 for these jeans so I'm going to change the price tag tomorrow. You're welcome to come back tomorrow and buy them then."
Life doesn't work that way, right? But in Toronto real estate, that's how it goes.
So the next time you see a place listed with an offer date, just remember that there are no rules in place that say the seller has to accept any of the offers they are presented with on offer night, even ones over asking. In Toronto, the seller decides when and if they choose to sell, and buyers are pretty much at the mercy of the process.
Too bad Toronto real estate doesn't operate like The Gap.
Have you checked out my previous blog posts?
Your Toronto condo lover,
iPro Realty Ltd, Brokerage
Direct: 647-223-1679 (call/text)