Monday 21 May 2018

Why won't they just look at my offer today?

You've spent time looking at houses, eliminated the ones you don't like, found the one you do.  You can totally picture yourself living there.  And you want to make an offer.

But you're told you can't.  Or at least not yet.  That can be quite frustrating.

'Offer deferrals' are something that was common in Toronto for a long time and crept into the local scene as the market heated up a few years ago.  An offer deferral is when a seller says "no offers until such-and-such a date", sometimes specifying an offer time as well.  Obviously, this is handy for sellers because they can plan ahead to be available for the offer presentation.

But the real reason they do it is to try to generate multiple offers, or "bidding wars" as they are commonly called.  In a hot sellers' market, offers can come in quickly and you might lose out on potential buyers.  Holding off offers for a few days gives more buyers a chance to get in and have a look.  And more showings mean more opportunity for multiple offers, which usually translates to higher offers for sellers. 

Buyers are understandably unhappy about this, but it's legal and sellers are free to take full advantage in a busy market that puts them in the driver's seat. 

At the peak of the market froth, it seemed like almost every new listing coming up had a 'no offers until' in the description. As the market has cooled off recently, you don't see as much of it but it's still not too difficult to find if you look. 

So what does a buyer do in this situation? 

When the seller is deferring offers to a certain date, you can still prepare an offer and "register it" - informing the listing agent that you have a signed offer.  Your agent will typically hold on to your offer until the day it is being presented to the seller, but once it is registered the listing agent is legally required to keep you informed about how many offers are registered or if there are any changes to the presentation date. 

Something you'll sometimes see in conjunction with offer deferrals is a statement along the lines of "pre-emptive offers allowed" (or not allowed).  I'll talk about that next time, when we look the ins and outs of what are commonly called "bully offers."

No comments:

Post a Comment