Toronto Real Estate: Holding Off Offers.

iStock_000000234992XSmallOver the past years a technique has developed that Realtors and the Public call: Holding Off Offers.

The idea is that the Seller and Realtor bring a property to the market through the TorontoMLS system with a note in the Broker’s remarks that although showing can commence at the time of listing, offers, if any, will be reviewed at a later date.

What is the reason for this? Are the Realtor and Seller manipulating the market to force multiple offers in an Auction-like scenario? Could be…but that can also backfire…What happens if, at the end of the time period, no offers appear or an offer appears that the Seller is unwilling to accept.

In the last case scenario, if a Realtor advertises a property on the market, knowing that the Seller has seen a full price, unconditional offer and not accepted it, then there is a case for “false advertising” that can be forwarded to the Real Estate Council of Ontario . The Seller and Realtor then should increase the listing price to a price that they know the Seller will accept. This can affect the marketing in a negative way.

I always counsel my Sellers that the list price must be a price that they would be okay to accept. It may not be their goal…mine is a 27 inch waist but that ship has already sunk.

I am a big supporter of holding off offers but let me tell you why:

  1. The market has been very fluid over the past few years with comparables selling all over the map. Pricing is not an exact science and if you were to ask five Realtors for their thoughts they would probably all be different….as would the Seller’s.
  2. Pricing has a lot to do with how many Buyers there are in the marketplace for that kind of property at that time. One week there might be five Buyer for a type of property and the next week, there might be one. Timing is everything and sometimes unexpected prices are reached because of the scarcity of product  that week.
  3. I want to make sure that my Sellers and I are not left with the thought that there might be more money on the table; that we could of had by more by waiting for another offer.

By bringing the property to the market, advertising on all the channels that are available including Agent’s Open Houses as well as Public Open Houses (Answering The Commission Question ) and then looking at offers a few days later, the Agent has done his due diligence to make sure that the property sells for the best price possible and the open market will set the price.

13 Responses

  1. Richard Silver Post author

    Thanks for your comments, both of you. I’m having fun but the business is always going through lots of change…some good, some….

  2. Barry Lebow

    Richard, I am not an advocate of setting a date and holding off offers. I think that from my discussions with buyers, many refuse to participate in auctions. They have been part of multiple offers and have been left with the feeling that they have been manipulated. I just sold my own house, not something that a Realtor finds easy. There were many willing buyers the price was reflective of the market. I have heard over and over from buyers, they just will not be part of a multiple scenario. Do you not believe that a hold off date eliminates many who would be willing to make a decent offer? I do.

  3. Richard Silver Post author

    “Holding off Offers” does not always generate Multiple offers. The main idea is exposure and in today’s complicated market it is important to make sure that the property is properly exposed.

  4. Brett Feeley

    Nice work Richard. Very good post about the reality of holding off on offers. Buyers hate multiple offers but most sellers think they’re great. But sometimes holding off on offers is the only choice.

  5. Tony Luke

    one of the other benefits is the house is usually sold firm, showings are over and life can return to normal more quickly..i think many feel there is a real benefit in that..

  6. Alex Prasoulis

    Holding back offers is an excellent strategy for homesellers but I beleive it will affect the Real Estate industry in a negative way in the near future. Buyers are getting really frustrated in multiple offer situations and it sometimes gives them a negative impression of the homebuying proccess when dealing with realtors in a multpiple offer situation. But they have no choice these days it seems. It seems that most Listing Realtors in the industry are using this strategy now because it favors the sellers interest so much. It seems to have become a norm in the industry for a large percentage of the sales done on mls these days. I beleive that in order to make the marketplace a more balanced market realtors should do a little more due dilligence and concentrate on pricing a property properly as opposed to taking the easy way out and pricing it under market and creating a bidding war. I never beleived in buying products in an auction type of environment because the urgency and pressure of buying in a rush may effect your judgement.

  7. Richard Silver Post author

    Thanks for all your comments….Alex, holding off offers is not the same as knowingly underpricing a Property. Last night I was one of six offers on a house that the Agent had told all comers, Realtors and Clients that even though it was priced at $579,000, the Seller and she were expecting to sell at $625,000 and up. That was unacceptable and a case of “False Advertising”…and to top it all off, the process was being filmed as a segment in a “reality show”. Some of us co-operating agents refused to be filmed but I think we all felt very manipulated….and we wonder why Realtors have a Public Relations problem?

  8. Daniel Bloch

    Great article Richard: here is my scoop, as a rounded agent but one who sadly works with more buyers then sellers, I find that its awful for the Buyer, I have found the majority of my Buyers end up going for something higher after going through the multiple offer process numerous times, 1 client of mine went through 5 offers before they secured their condo at 36K over asking, did I feel good, of course not, will they be happy? absolutely!! and thats what matters at the end of the day for the buyer, but its a nasty game, and I find being a good or professional agent makes no difference its all numbers.

    Sellers on the other hand, I dont price lower but shoot for pricing right(even though it doesnt always happen), but I believe in holding off offers, because I want to get them the most for their home, and I want as many buyers to get in and get a chance to see this home, I want those agents to get the chance to show it as well, and I think thats fair,

    Keep up the hard work my fellow Realtors! and dont forget to thank that agent for his offer;)

  9. Bev Breslow

    I could say a lot about holding back offers — just don’t have the time. My main concern is buyers (more likely their agents) who enter into bidding wars unconditionally. The best offers are not always the unconditional ones. Will the buyer still be able to get his mortgage commitment if the property appraises for substantially less than he paid? Should we be putting our seller at risk (and ourselves for that matter) if we discourage him from accepting an offer conditional on a home inspection? My objective has always been to ensure the successful completion of a transaction, with all parties being satisfied that their best interests have been addressed.

  10. Tom Lebour

    This approach would work even better if the listing agent provides a pre-listing inspection when holding off on offers.

    Buyers can do their due diligince and make an informed decision, while waiting for the presentation of offers deadline.

  11. Richard Silver Post author

    Thanks Tom. I try to provide the Pre-listing Inspection wherever possible, however there are some Buyers who still want their own one done.

    However, at least we are alerted to any potential problems by first doing a pre-listing inspection….

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