Bidding wars are something very common in Toronto's real estate market and when the market was at its peak during 2012, we even saw over seven offers on a particular property. However, now the buyers in Toronto are cheesed off and they are willing to do just anything to avoid getting into a bidding war - possibly even walk away from their so-called dream home. Interestingly, as buyers and agents have become more inventive regarding buying, it is possible for the buyers to not only see, but even acquire their dream homes.
With a view to avoid bidding wars, the agents have resorted to the old tactic of submitting the offer of their client just before the offer deadline ends. In this case, the agent would submit an offer higher than the others and there would be hardly any time left for others to place a higher bid than his client's. However, some agents have adopted an opposite strategy to avoid bidding wars by submitting offers much lower than the marked price and much before the end of the offer deadline.
Recently, Robin Pope, a realty agent in Toronto, found this approach to be effective. For one client who was keen on purchasing a property in Toronto, he placed an offer $75,000 below the marked price and submitted it much before the offer deadline. In fact, it was placed so much in advance that the agent of the seller called up Pope to make sure if he was not confused with the days.
In effect, Pope has not made any mistake and his approach worked. That particular property did not receive any other offer and while the seller managed to bargain for a higher price, the buyer succeeded in getting what he wanted without having to face any competition from other buyers.
According to Pope, the reason why his strategy worked is just owing to the current fickleness of Toronto's realty market. He said as the buyers are tired over the bidding war and are no longer motivated to compete with other prospective buyers for their dream home, especially when there are many properties available and the sellers are impatient.
He, however, points out that the current situation is neither bad for sellers or buyers. Actually, for a long time now, real estate transactions have been done in this manner. While buyers presented their offer and provided that was turned down, the sellers gave a counter-offer. In case, it was not acceptable to the buyers, they submitted a new counter-offer, higher than the initial offer, but lower than what the seller has been asking. This procedure would continue till both parties settled on a mutually accepted offer.
Pope believes that this is the way in which real estate transactions ought to be conducted.