Bidding Wars for Sellers: Get Multiple Offers on Your BC Property & Sell for More Than List Price

by Richard Morrison
August 8, 2016
Sellers
0

Canadian Sellers: How To Start a Bidding War

Selling a home in BC’s fiercely competitive market often means navigating intense bidding wars. While stressful, bidding wars give savvy sellers opportunities to maximize sale prices. This comprehensive guide covers everything you need to effectively leverage bidding wars to your advantage as a BC seller.

Table of Contents show

Key Takeaways

Strategic pricing and staging sparks bidding wars
Weigh all offer terms – highest bid isn’t necessarily best
New rules require disclosing number/source of bids
Carefully manage appraisal risks with gap coverage
Negotiate verbally with multiple bidders to drive up prices
Avoid unethical tactics – transparent bidding builds goodwill

How Bidding Wars Work in BC Real Estate

A bidding war starts when multiple buyers compete for a home by making escalating offers, fueled by urgency in a supply-constrained market.

Bidding wars differ from regular multiple offers in the incremental auction-like battle between bidders fighting not to lose out. Sellers often intentionally spur this along.

Did you know 78% of BC homes sold over asking price had a bidding war, according to a survey by Richard Morrison?

New Rules Around Disclosing Bids

As of July 17, 2023, rules now require listing agents to provide a verified form within 24 hours to all bidding agents disclosing:

Number of total offers
Brokerages involved
Dates offers submitted

This transparency helps sellers gauge competition.

The Pros and Cons of Bidding Wars for Sellers

Bidding wars present trade-offs for sellers between maximizing prices and headaches:

Potential Advantages

Opportunity to drive up sale price
Buyers bid higher in fear of losing out
Creates urgency and decisiveness in buyers
Chance to get over asking price

Risks and Downsides

Highly stressful negotiations
Buyers may overbid past actual value
Appraisal may come in lower than sale price
Buyers can rescind offers if they have regrets
Risk of agents encouraging unethical escalation

How to Create Bidding Wars on Your BC Property

Sparking a bidding war takes planning. Use these tips:

Price Aggressively – Price just below comparables to attract high demand.

Stage Attractively – Invest in furnishings and fixes to showcase benefits.

Delay Showings – Build anticipation by limiting initial access.

Set Offer Deadline – Review all bids together on a fixed day to encourage competition.

Prepare Documentation – Make property information readily available to buyers.

Handling Offers for Maximum Gain

Careful bidding war management ensures you maximize price while mitigating risks:

Weigh All Factors – Highest bid isn’t necessarily the optimal deal overall.

Cover Appraisal Gaps – Ensure offers bridge any gaps between bid and appraised value.

Negotiate Skillfully – Don’t immediately accept one offer, verbally negotiate improved terms from multiple bidders.

Maintain Transparency – Disclose offer details ethically to drive competition.

Stay Organized – Keep meticulous documentation on all bids and communications.

Avoid Unethical Tactics – Greed can undermine goodwill and jeopardize sales.

Assessing Offers From All Angles

With multiple enticing bids to choose from, look beyond just dollar amounts:

Offer Price – Of course top consideration, but balance against other factors.

Closing Date – Does the proposed timeline work for your needs?

Deposit Amount – Higher deposits keep buyers invested.

Conditions – Non-conditional offers provide more security.

Down Payment – Bigger down payments help buyers manage appraisal gaps.

Appraisal Gap Coverage – Ensure buyers commit to bridging gaps between appraised value and bid price.

Negotiating Strategies to Maximize Price

Skillful negotiations are key to leveraging competing bids for highest revenue:

Invite verbal improvements from all or top bidders without accepting any offers in writing.
Give fair chances for bidders to re-submit improved terms.
Disclose number of offers, not specifics, to fuel blind competition.
Eliminate weaker bids as bargaining progresses.
Eventually accept final written offer once satisfied with price and terms.
Resist pressure to accept an early standout bid prematurely.

What Not to Do in a Bidding War

While bargaining power resides with sellers, ethical obligations remain:

Don’t prolong negotiations excessively to force escalating prices.
Avoid fabricating offer details or leveraging information unethically.
Don’t mislead or unfairly manipulate bidders.

Such bad faith tactics can undermine goodwill and backfire on sellers.

Final Tips for Bidding War Success

A few key principles set up BC sellers for bidding war victory:

Price aggressively to spark competition.
Hire an experienced agent to guide negotiations.
Remember bidding wars mean stress as well as revenue.
Maintain reasonable expectations – don’t get greedy.
Focus on finding the optimal buyer, not just highest bidder.

With proper preparation and strategic bidding management, you can leverage today’s seller’s market to your advantage while keeping perspective on what matters most.

Frequently Asked Questions

Q: What is a bidding war for sellers?

A: A bidding war for sellers occurs when multiple potential buyers are competing to purchase the same property. This can lead to an increase in the selling price of the property.

Q: How do I handle multiple offers?

A: When you receive multiple offers on your home, it’s important to take some time to compare them and make sure that you understand all of the terms being offered. You should also review the buyer’s loan pre-approval letter from their lender and check with your real estate agent or broker to find out more about each potential buyer. Lastly, consider any contingencies in each offer as this could affect your decision.

Q: What is the best way to win a bidding war?

A: Winning a bidding war requires careful planning and strategy. The best way to win a bidding war is by understanding what the market value is for the home, making sure that you have a pre-approved loan from a lender, making sure that you have a competitive offer that meets or exceeds market value, and ensuring that you waive any contingencies that might delay or prevent closing.

Q: What is the best offer in a multiple offer situation?

A: In a multiple offer situation it can be difficult to determine which offer is best. Generally speaking, it will depend on factors such as how much money they are willing to put down as well as how quickly they are able and willing to close on the property. Additionally, considering other contingencies like home inspection results or financing requirements can help determine which buyer has made the most attractive offer.

Q: What rules do I need to follow when handling a real estate bidding war?

A: There are several rules that must be followed when handling a real estate bidding war including providing all potential buyers with equal opportunity, being transparent about all offers received, giving all prospective buyers enough time to review documents and submit their highest offer in writing, notifying all buyers of changes or updates during the process of negotiation, and notifying all buyers if another offer has been received.

Q: What role does my real estate agent play in handling multiple offers?

A: Your real estate agent plays an important role in helping you handle multiple offers by giving advice on negotiating tactics and strategies during the process. They can provide guidance on how best to structure an agreement between buyer and seller, assist with communication between parties involved in negotiations, provide insight into current market conditions so that appropriate decisions can be made regarding pricing and other terms of sale.

Q: What are some tips for getting many offers on my home?

A: Some tips for getting many offers on your home include setting an attractive asking price based on comps in your area; staging your home; marketing it through online listings as well as open houses; utilizing professional photography; offering incentives such as covering closing costs or providing appliances; having flexible showing times; negotiating earnest money deposits; allowing contingencies like inspections or financing; advertising through local publications or media outlets; and having strong communication skills when talking with potential buyers.

Q: How does one know if they have received their highest offer during a real estate bidding process?

A: Knowing if you have received your highest offer during a real estate bidding process can be difficult because there may be competing bids being submitted at different times by different buyers. To ensure that you get your highest possible offer during this process it’s important to keep up with market trends by having conversations with potential buyers’ agents/realtors regarding what they think would be fair market value for similar properties nearby.

Q :What are some best practices for winning a bidding war against many offers?

Some best practices for winning a bidding war against many offers include: doing research ahead of time so you know what comparable properties have sold recently; getting pre-approved from lenders before submitting an offer so you can demonstrate financial stability; communicating clearly throughout the process; offering incentives such as paying closing costs; waiving certain contingencies like home inspections; understanding market conditions so you know what kind of competition there may be; being flexible about timing (accepting earlier closings if possible); working with experienced agents who understand local customs around how these wars aren’t always won by simply offering up the highest bid.

Q :What should I do if I receive an offer lower than my asking price ?

If you receive an offer lower than your asking price, it’s important to carefully evaluate each buyer’s circumstances before deciding whether or not to accept. Consider factors such as whether they have been pre-approved by their lender, how quickly they are able to close, whether they require any special financing arrangements, how motivated they seem, or other contingencies included in their written, signed offers. Additionally, talking with both your listing agent (seller’s agent) & buyer’s agent (broker) may help shed light on why this particular buyer may be offering less than list price. Ultimately though, it’s up to you whether or not to accept this lower priced bid.

Conclusion

For savvy BC sellers ready to navigate intense bidding wars, the rewards can be ample. Following ethical practices, leveraging new transparency rules, negotiating skillfully and keeping perspective allows maximizing financial gain while making the optimal match with a buyer who will cherish your home. Stay focused on your goals and work collaboratively with buyers to achieve an outcome that benefits all.

Bidding wars in the real estate market can be a great thing for home sellers. It is a practice of bidding on a home where multiple buyers are competing against each other to purchase the property. In this situation, buyers will submit offers and the seller can choose to accept one of the offers or make a counter offer. This system works best in hot real estate markets where there is high demand and limited supply.

Real estate agents have rules they must follow and must adhere to the rules by BCREA. It is important that all parties involved understand that it is not always the best idea to accept a lower offer in order to come out on top. Houses that sell due to bidding wars often need proper contingencies in place in order for the real estate transaction to proceed smoothly.

Listing your home with an experienced selling agent and ensuring that there are number of registered offers can often be the best way for home sellers to maximize their profits.

Sources:

https://www.bcfsa.ca/public-resources/real-estate/mandatory-disclosure

https://vancouversun.com/business/calls-to-examine-bidding-process-and-multiple-offers-in-b-c-real-estate-deals

Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.

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