Multiple offers—or “bidding wars”—are often a source of overwhelm when buying or selling a home. When several buyers simultaneously vie for the same Ottawa property, the situation can be stressful and confusing for all participants.
Recent legislative changes under the Trust in Real Estate Services Act (TRESA) regarding multiple offers represent a significant shift from the previous rules outlined in the Real Estate and Business Brokers Act (REBBA). Angie White, Broker Manager at Paul Rushforth Real Estate, breaks down the new multiple offer regulations and explains how they are reshaping buying and selling strategies in Ottawa.
What Are Multiple Offers?
A multiple-offer scenario emerges when a property attracts interest from more than one prospective buyer. We often see this in a hot market (most recently, the strong seller’s market during COVID-19) or when a particularly desirable home comes on the market. Demand outstrips supply, pushing multiple buyers to compete against one another and sometimes driving the final sale price above the asking price.
2024 Changes to Ontario’s Multiple Offer Regulations
Previously, the seller’s agent was obliged to disclose the existence and number of offers on a property in multiple-offer scenarios. Buyers were encouraged to submit their best possible offer without knowing the details of other bids.
Phase 2 of TRESA, which took effect on December 1, 2023, introduced a new approach to handling multiple offers. Angie shares that “the seller now has the right to disclose more than just how many offers are in play.”
Today, sellers can choose to disclose specific aspects of an offer, such as the price, the closing date, and other information. And, as White explains, “Sellers can change their mind at any time.” Sellers may adapt their strategy in real-time based on how the offers unfold. This decision can be made upfront when signing the listing agreement or adjusted as offers come in, providing sellers with flexibility in how they approach the sale of their property. Any decision to share the content of offers must be communicated to all interested parties in writing.
However, this disclosure is not mandatory for buyers, and absolutely no personal information can be shared that would identify the person making the offer. Additionally, buyers can include a clause in the agreement of purchase and sale that defines if and how they’ll accept offer information to be disclosed.
Angie explains that it’s risky to sell your home privately in high-stakes situations like this. The “guidance of well-informed, experienced real estate agents is invaluable” because the decision to disclose is complex, requiring careful consideration of the potential benefits and drawbacks to ensure the best outcome for all parties involved.
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Seller Insights: Multiple Offer Situations
Many sellers dream of receiving multiple offers on their Ottawa property. Multiple offers suggest high interest, potentially leading to a high sale price or more favourable terms, such as shorter closing periods or fewer contingencies.
At first glance, Ontario’s new multiple offer rule might seem to advantage sellers by giving them more control over the bidding process and an opportunity to further maximize the return on their investment. Despite this, Angie notes that the decision to disclose offer details is nuanced, explaining, “It’s not always in the seller’s best interest to tell you the full truth.” For example, suppose a seller reveals the highest offer. In that case, it might discourage other potential buyers from submitting an offer at their intended price point, or submitting an offer at all, potentially capping the property’s selling price below what might have been achieved in a fully blind bidding situation.
In reality, dealing with multiple offers can be challenging. Decision overload is real, and the pressure of making the right decision adds stress to the process.
Tips for Sellers
1. Understand Market Dynamics: The agents at Paul Rushforth Real Estate provide unmatched insight into current market conditions and fully understand how your property compares to others. This knowledge is crucial in setting a strategic listing price that maximizes interest and potential offers.
2. Strategically Set the Listing Price: Deciding on a price is both art and science. One listing agent might recommend setting a price expected to attract immediate offers, while another may suggest a lower listing price to generate buzz and encourage a bidding war.
3. Discuss Offer Sharing with Your Agent: Successfully navigating this new opportunity requires careful strategy, expert advice, and a clear market understanding. With the right approach and experienced guidance, home sellers can maximize the benefits of receiving multiple offers.
4. Optimize Marketing and Advertising: List your home with Paul Rushforth to get the highest-quality photos, targeted advertising, and a powerful social media presence that attracts more potential buyers.
5. Prepare for All Outcomes: Preparing mentally for various scenarios, from receiving no offers to dealing with an overwhelming number, can reduce stress and lead to more informed decision-making. And, in multiple offer situations, you must realize that buyers may react differently to the disclosure of offer contents. Some may withdraw from the process, while others might adjust their offers based on the shared information.
6. Evaluate Your Options: In a multiple-offer scenario, lean on your Paul Rushforth real estate agent for expertise in evaluating offers, negotiating terms, and making informed decisions that align with your goals.
7. Remain Flexible and Open: Strategies should be adapted based on how the sales process evolves. Market conditions can change, and what works for one property might not work for another. Your Paul Rushforth agent will help you navigate these shifts, offering advice tailored to your unique situation.
Buyer Insights: Multiple Offer Situations
Entering a multiple-offer situation as a buyer can be both exhilarating and daunting. The competitive nature of the circumstances can dampen the excitement of landing your dream home. It’s emotional, and buyers must balance their desire for the property with the reality of their financial limits.
In traditional “blind bidding,” the details of competing offers remained undisclosed. While this situation can certainly still happen in Ontario, the new TRESA regulations have changed the rules, making the process more transparent if the seller wishes to disclose additional offer details.
As a result, Angie urges buyers to speak with their agents at length before an offer is submitted to determine their comfort level should their offers be shared. (It’s worth mentioning again that this disclosure isn’t obligatory, and information that could reveal the offeror’s identity is strictly protected.)
Tips for Buyers
1. Research the Market: Understanding the market value of the property and similar homes in the area is crucial. An experienced buyer’s agent can provide insights into the Home Price Index (HPI) and recent sales, offering a factual basis for your offer.
2. Assess Your Comfort with Offer Disclosure: As a buyer, you must decide whether you’re comfortable with a seller disclosing the content of your offer. This decision should be informed by a thorough discussion with your agent about the potential implications for your bidding strategy.
3. Make Your Offer Stand Out: Besides a strong offer price, include terms that will appeal to the seller, such as flexible closing dates or minimal contingencies. These can make your offer more attractive without necessarily increasing the amount.
Note: Be careful. Offering more than you initially planned or removing protective conditions aren’t always in your best interest. During COVID-19, skipping a home inspection became commonplace, but this practice may lead to unforeseen expenses if issues with the property later come to light. Similarly, Angie advocates obtaining current condo corporation status certificates rather than relying on outdated information. This cautionary step is particularly relevant in multiple offer situations, where the allure of winning a bid might tempt buyers to overlook a condo’s long-term viability.
3. Be Ready to Move Quickly: Obtain financing pre-approval and have a clear understanding of your maximum offer. In fast-paced multiple-offer situations, the ability to act swiftly can be a significant advantage. Also, in a multiple-offer situation, a seller can decide to share offer details at any point in the process. This unpredictability requires flexibility in your approach and readiness to adapt your offer in response to new information.
4. Recognize the Emotional Element: Angie emphasizes that recognizing the emotional investment in a property you have fallen in love with “helps buyers prepare for various outcomes and remain resilient.”
5. Be Prepared (If Things Don’t Go Your Way): In multiple-offer situations, the reality is not every bid can win, and disappointment is a part of the process. Take time to reflect, regroup, adjust your strategy (if needed), and, most importantly, stay informed. Your agent should continue to monitor the market. New listings or changes in market dynamics can present new opportunities.
Expert Guidance From Trusted Agents: The Paul Rushforth Difference
Multiple offer scenarios are filled with opportunities and challenges. Having a real estate agent with deep market knowledge and an understanding of these complex dynamics is extremely helpful.
The agents at Paul Rushforth Real Estate bring a wealth of knowledge, experience, and skill to the table. We understand the emotional and financial stakes involved in multiple-offer situations and Ontario’s evolving real estate laws, including the latest changes under TRESA.
Don’t leave your success to chance, partner with a Paul Rushfoth agent today.
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Paul Rushforth Real Estate is a member of the Ottawa Real Estate Board, the Ontario Real Estate Association, and the Canadian Real Estate Association.
