The real estate market ebbs and flows, depending on many factors, including interest rates, global politics and the local weather report. When we are in a seller’s market, meaning there are more buyers than sellers and house prices trend upwards, bidding wars are popular. Bidding wars come and go depending on the current market conditions. Generally, because they only work in seller’s markets, they tend to be successful in the spring and fall and less successful in the summer and winter.
Need a refresher on how offer nights work? Click here to read our blog post on the topic.
Sometimes, a seller and listing agent will work to create a bidding war and then not get one. This can devastate sellers, especially if they have bought something else and must sell their home. However, there is no reason to believe your home won’t sell when it doesn’t sell on offer night. We have a proven strategy to make sure your house will still sell after offer night has passed. First, let’s get into the nuts and bolts of a bidding war.
Looking for more tips to help your home fetch top dollar? Check out these blog posts.
- 5 Characteristics of a Great Listing Agent
- Should I Hire My Friend to Sell My Home?
- How to Sell Your House to a Millenial
What is a Bidding War?
A bidding war occurs when a seller underprices their home and sets a specific date for when they will review offers. This is called an “offer date.” We also call this “holding back on offers.” The owner and listing agents then hope to drum up so much interest in the property that they get multiple offers on their offer date, and the house will sell for far more money than it was listed for. Bidding wars are the most successful when your micro-market has a shortage of listings.
A home must also check the boxes of most buyers’ wish lists to be successful. This generally means it should have 2-3 bedrooms, be in a good location, have parking, and, if you want to win big as a seller, have a basement apartment.
Are Bidding War Strategies Always Successful?
No! Buyers are fickle and move in packs from one property to another. Sometimes even the best property doesn’t sell on offer night. A failed bidding war can be devastating for sellers. There are a few reasons why a listing doesn’t generate a bidding war.
You didn’t actually underprice your listing. This is the most common reason for a failed bidding war. Prospective buyers are used to bidding wars and automatically add 20-30% to the house listings. If you’ve priced your listing too high with an offer date, they won’t even bother seeing or offering on your home.
There were too many houses with offer nights on the same night. Buyers will flock to one home on offer night and forget about other listings. If many places are comparable to yours with the same offer nights, you may end up with a house that gets temporarily forgotten.
The market is shifting: Contrary to popular belief, the Toronto market is not always down or up. Many periods within a seller’s market slow down. And, in buyer’s markets, there are moments of high competition. You may hit a particular week where a lull is occurring, and you don’t get as many buyers to your listing.
Real estate in West Toronto can shift at the drop of a hat. Explore these blogs to get a sense of what’s happening in the market.
- Spring Market Survival Guide
- Should You Buy Real Estate in a Recession?
- Are Roncesvalles Homes Holding Their Value?
What if Your House Doesn’t Sell on Offer Night?
Don’t panic! Just because selling your house on offer night didn’t work doesn’t mean your home won’t sell. You may need to wait a few more days or weeks, but your house will sell in Toronto.
List your house at market value: If you had an offer date set, that probably means that you also intentionally listed your home for less than market value hoping to get a bidding war. If you don’t get that bidding war on offer night, it’s time to give up that dream. You should re-list your home for market value and look at offers anytime. This is a good strategy because there will always be a group of buyers who dislike bidding wars and wait for homes to be listed at market value. If you list your house for a price you’re prepared to accept at any time, you’ll find one very grateful buyer.
Be realistic: The Toronto market remains strong whether we are in a buyer’s or seller’s market. However, it can rarely sell overpriced homes. To sell your home, you must always be realistic about its value. This is the essential step to a successful house sale.
Good Luck! Selling your home takes work. But, if you hire a good agent and price your home correctly, your home will sell.