By Michael McCann
Just because someone sets the rules, it doesn’t mean you have to follow them.
With our ongoing hot real estate market some home buyers have decided enough is enough and are refusing to play by the rules. Over the last month I am seeing a new tactic being employed.
Normally on any MLS listing there is a section called Brokerage Remarks – this is only accessible to realtors. It’s here where specific instructions can be stated by the seller and their realtor, providing details and additional information for those considering submitting an offer.
Here’s an example of what you might read:
Offers welcomed, if any, on Thursday February 12 at 7 pm @ the house. Please register by 5pm. The Seller reserves the right to accept pre-emptive offers.
Normally buyers interested in purchasing the house would all dutifully wait until February 12 and then amass at the assigned time with the hope their offer would emerge as the successful one. However, not everyone follows the rules.
Buyers, having become frustrated with this established process, have now decided to say “to hell with the rules”. So sellers are seeing buyers submitting a pre-emptive offer, one that precedes the offer date, in the hope that it will avoid a multiple offer scenario.
Multiple pre-emptive offers
This pre-emptive first strike buyer’s tactic appears sound in order to jump the queue. Unfortunately in most cases it just escalates the timeline.
To be fair to sellers, realtors can refuse to entertain early offers but it’s their call. Let’s say they are willing to look at it.
When an agent calls me to say they are intending to submit a bully offer it forces me to alter my best practices.
In order to be fair and transparent, I will call every agent who has shown the house in the past, as well as those with future appointments, and notify them that a bully offer is coming prior to the seller’s established offer date.
In most instances it unfolds like this. Those buyers who were waiting will now also prepare pre-emptive offers. Instead of avoiding a multiple offer situation you now have additional offers from those also jumping the queue.
Most likely, in the end, the seller will get more than the asking price.
Our housing market is continuing to see rapidly increasing housing prices and this is only early March. There is a real shortage of housing inventory and demand for our neighbourhood does not seem to be diminishing.
It has been a couple of months since we have published Birchcliff’s housing statistics so let’s get caught up to date.
Birch Cliff – Cliffside Home Sales in November 2016 – 19 homes sold
Birchcliff/Cliffside
- November last year 15 homes sold with 19 selling in November this year
- Last November the average selling price was $645,804 and in November 2016 $858,147 – an increase of 33% year over year
- It took on average 15 days last November and this year 19 days
Toronto Real Estate Board
- 7,337 sales in November 2015 with November 2016 showing 8,547 – Up 16.5%
- The average selling price for November 2015 was $632,774 and September this year $776,684 – Up 22.7%
- Last November it took an average of 26 days to sell a home where in November 2016 it was 17 days
Birch Cliff – Cliffside Home Sales in December 2016 – 7 homes sold
Birchcliff/Cliffside
- December 2015, 13 homes sold while December 2016 it was 7*
- The average selling price last December was $646,262 and this past December it was $911,414* – an increase of 41% year over year
- Last December it took 13 days on average to sell a Birchcliff home while this past December it was a 6 days
* In December 2016, a Birchcliff home sold for $2.8 million so in order to avoid inflating our average statistical count I have not included it.
Toronto Real Estate Board
- 4,917 sales occurred in December last year and in December 2016 it was 5,558 – An increase of 8.6%
- In December last year the average sale price was $608,714 and this year the average price was $730,472 – Up 20% year over year
- It took 29 days for a house to sell last December and only 20 days in December of this year
Birch Cliff – Cliffside Home Sales in January 2017 – 19 homes sold
Birchcliff/Cliffside
- In January last year 14 homes sold and this past January 18
- Our average selling price in January 2016 was 692,839 and in January 2017 $841,001 – An increase of 21%
- It took an average of 21 days to sell a home last January and this past month 19 days
Toronto Real Estate Board
- There were 4,640 sales last January and in January 2017 it jumped to 5,188 – An increase of 11.8%
- The average January 2016 sale price was $630,193 and in January of this year $770,745 – An increase of 22.3%
- I took 29 days on average to sell a home last January and only 19 in January 2017
