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“How much should we offer for this place?”
Perhaps the most common question would-be home buyers ask me is “What do you think this house will sell for?”. (Actually, home OWNERS ask the same question).
The real, honest answer is: “Whatever someone is willing to pay for it.” Since we don’t have a Crystal Ball, no one can predict the final selling price. It all depends on how many offers there are on a house, and how badly someone wants it. Incidentally, I don’t like the term “bidding war”, because that is really not correct or descriptive of the process. But here are a couple of guidelines to help us along in the offer process:
If the house has been on the market for a few weeks, or even months (yes, that DOES happen, even in Winnipeg), and the owner and their agent have never adjusted the price, the buyer might try to offer something a little lower than asking-price. Provided that the buyer (with his own agent) has done some comparing and homework, and assuming that the listing price of the house is not ‘pie-in-the-sky-dreamin’, an offer of a few thousand below asking price might be accepted.
If the house is ‘taking offers’ on a given date, and the buyer is lucky enough not to have to compete, putting in an offer of full-asking price might not be a bad idea. Again, I stress that the buyer thru his agent, has performed a comparison-study of the house, and assured that it is fairly priced. Assuming the asking price is realistic, a buyer might be well advised to count their blessings for not having to compete against a number of other buyers.
If the house in question is receiving 5, 6, (thirty?) offers, then all bets are off. I’ve seen some pretty scary and ridiculous things happen in a case like this, and my best advice to my buyer would be: “Write your best offer….your walk-away price”. In other words, if the house goes for more than your offer, you feel you’ve given it your best shot and don’t wake up the next day going “Doh” ala Homer Simpson.
The reason that ‘bidding war’ is somewhat of a misnomer: In a case of so many offers, the process is really pretty simple…..put your best offer forward and hope for the best. On the plus side, at least you will find out almost immediately (within hours, anyway) whether your offer is accepted.
I’ve had a few buyers who have tried to buy a “Private Sale”, and were left hanging for a week before being rejected. In their case, they could not go out and pursue other homes, while their offers, (along with the deposit cheques) languished in the home-owners hands. It seems that some private sellers are being ‘coached’ to hold on to offers and tell the buyers that they have to “think about it?”. Then, during the next week, while they are no doubt thinking hard, they are also ‘shopping the offer around’.
Please remember this: yes, the market is hot, competition for homes is fierce. However, homes listed with Realtors still have certain rules to follow, whereas private sellers are pretty much left unregulated. Its ‘buyer beware’ to the extreme…
If you’re thinking of making an offer on a house or condo, call me first….
Bo Kauffmann 333-2202
Related articles
- Why isn’t my home selling and what needs to change to get this job done? (teamfisher.com)
- The MLS does NOT sell homes! (bokauffmann.com)
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