I’m planning on selling my home in the next few months. Some of the homes that have sold recently in my area went into bidding wars. Is there anything I should know if my home receives multiple offers?
The spring real estate season is in full swing and in some areas of Ontario, where demand for homes exceeds supply, sellers may receive multiple offers at one time. While you may be excited about the prospect of receiving more than one offer on your home, remember that there are a number of important steps and decisions to make before the “for sale” sign goes up.
You’ll want to meet with several registered real estate professionals before selecting the one who’s right for you. Asking friends and family that have recently bought or sold a home for referrals is a good place to start. Take the time to ask questions, learn about the representatives’ experience in selling properties similar to yours and discuss their approach for marketing your home. This is also a good time to voice your expectations about the process and strategy. Remember to visit the Real Estate Professional Search to verify the representative’s registration.
Once you select a representative that you’re comfortable with, you’ll be asked to sign a listing agreement. This is a legally binding contract between you and the brokerage where your representative works. Before signing, make sure you read and understand the agreement in full. If there is anything you are unsure about, discuss it with the representative or the brokerage’s manager, and consider seeking independent legal advice before signing. Also, be sure that your understanding of the specifics about the marketing strategy and other pertinent details you discussed are included in writing in the listing agreement. If your representative recommends additional suppliers, for example a home inspector, home stager, or photographer, satisfy yourself about the benefits of these services and determine who will pay for them before agreeing to engage them. Most disagreements are not because someone is trying to pull a fast one, but from a lack of common understanding on the part of both parties.
Once your home is listed, you’ll want to get ready for visitors. Between open houses and showings, there could be a significant number of people coming through your home. Be sure to remove and securely store all valuables, including jewelry, small electronics, financial statements, credit card receipts and prescription medications.
Agree with your representative on a game plan for showings and offers. For example:
- How much notice do you require before confirming a showing for a potential buyer?
- Do you want someone to escort potential buyers through the home at all times during an open house?
- Do you want to receive offers via email, fax or in person?
- Do you want potential buyers to submit offers at any time or on a particular date?
Consider what is important to you and discuss the pros and cons of each option with your registered real estate professional.
If you receive more than one offer, your representative is obligated to disclose certain information to everyone that has submitted an offer: the number of offers that have been received, whether any of the buyers are represented by the same brokerage as you and whether the brokerage has a commission agreement with you, the seller, that may give its buyers an advantage.
Once the offers are presented, you can accept one of the offers, reject all the offers, send offers back for improvement or make a counter offer to one buyer. In keeping with the Code of Ethics that governs real estate professionals in Ontario, your representative is required to keep the details of each offer confidential between you and themselves. They can’t share the details of any offers with anyone without your permission, though they must disclose to those making offers the items described above.
In some cases, sellers may provide potential buyers the opportunity to improve their offers (also referred to as sending back the offer). Keep in mind, this approach has risks that you should discuss with your representative.
In selecting an offer to “work with” or accept, you don’t have to select solely based on price. If other considerations, such as the deposit amount, closing date or conditions, are more important to you, you can select an offer that best suits your preferences.
While having a successful selling experience may mean selling your home at a certain price point, all of the work that goes into the preparation is just as critical in achieving your desired outcome. Be informed about the process, ask questions, voice your needs and concerns and have open lines of communication with your registered real estate professional.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.