Bidding Wars

by Darrin DeRoches August 21 - 27, 2014

All of a sudden there seems to be an epidemic of hold back offers in Hamilton. A hold back offer is when the sellers decide that they will not look at any offers until a certain date. They want the market to have a week or so to look at the property and then, on a certain date, send in offers. The real intention is to create a “bidding war” which makes buyers compete against each other. This works in some cases but it seems to backfire more often than not.     I have several clients that will not even look at properties if there is a hold back date. They do not want to be “duped” into a false sense of urgency and over pay for a property. These hold back dates are causing more harm to a property than good. It also gives clients a week to change their minds — over and over again.     I showed a great little cottage in the west end and we left feeling pretty good about the property but had four days until offers accepted. The night before it was time to make offers, my clients decided not to write an offer. They fell out of love with the property and if we could have made an offer the first day, I am sure we would have closed. The property hit all the boxes on their wish list but when you have time to think about it, you think “there might be better coming out”. I checked today on the property and it is still on the market. I guess all of the other buyers felt the same way.     On the other side of the spectrum, I see good agents putting up properties that sell within days for top dollar and everyone wins. The agent makes a quick sale. The sellers get it sold without weeks of showings and disruptions. The buyers are excited and pay the market value. Everyone wins. If you really think about it, are you selling a property or are you squeezing out every penny you can? A good agent will negotiate the best price with one buyer instead of multiple offers that may or may not close the deal.     The hold back does bear fruit in some instances but lately I have seen more failures than successes and agents are over using a tactic that can hurt a property’s sale and make them sit on the market and go stale. This time of the year is usually pretty slow for real estate, as everyone is on vacation and getting ready to go back to school. Often you can find a good property while everyone is too busy, and I have seen a listing that would work great for my clients, but then I saw a hold back. These properties should wait a couple of weeks for the market to pick back up and then it would work. We are going to wait to pass the date and then see if it is still on the market and scoop it up for a better price. Timing can be everything! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca