Having been involved in no less than three “multiple offer” transactions on behalf of seller and buyer clients in the past week, I began reflecting on the stress it places on all those participating.
Certain “entry level” price ranges tend to attract high demand and, where the presence of a suite (“mortgage helper”) is important to the buyer, it is not unusual to have 30 or 40 sets of folk visiting the offering. This can (and often does) lead to anything from 3 to up to 10 offers being presented to the seller. Exciting for the seller; nerve wracking for the buyer group. One “winner” is accepted and a selection of “bridesmaids” emerge. Offers typically range from just below the asking price to, say, 2 to 8% above asking price with a variety of conditions (inspection, mortgage approval) proposed, all the way to the brave (maybe foolhardy) souls who propose “no conditions” (subjects). It is not unusual, too, to find all but one offeror rather unhappy and, on occasion, the “lucky” buyer unhappy, believing they have overpaid.
Some criticism is often levied at the establishment of the “asking price”, when, with the benefit of hindsight, a final sale price emerges at a level way higher than that at which the home was offered for sale. At the risk of incurring the wrath of certain colleagues I will pose the question – do we as Realtor® advisors have an obligation to discourage our selling clients from severely under pricing the property listed for sale? I believe we do. There is however an argument to be made that this aberration is brought about by the market when a high level of demand exists. I wrote last month (October) about the desire for balance (stability) in the market and, to this I would add a desire for calming “unruly markets”.
Last month I made a recommendation regarding “rate guarantees. Rates, while still relatively stable, saw about a 0.3% increase in the fixed term offerings in the past week. If you missed doing it last month I strongly recommend obtaining this “guarantee” as well as a financing “pre-approval”. Most financial institutions will provide these for up to 90 days. Your banker or mortgage broker will help with this. Overall the North Shore is seeing a continued drop in inventory and this trend is not in lock step with the general one evident in Greater Vancouver where inventories are recently showing a varied pattern of increases. Our prices still appear to have upward potential? Some slowdown in actual sales will likely occur as we head toward the holiday season.
Again, visit my website to see and “hear” the new developments. I continue my commitment to keep you... www.OnTopOfTheMarket.ca - the “go to” site for North Shore Real Estate analysis and jumping off point for FULL market listing information.
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