If you've been house hunting in Toronto in the last 10 years, you've probably heard of the term ‘Offer Night’. Offer night is the term often used for the day (often the evening) when the sellers specifically will review offers. It will usually be after a 5-7 day marketing period and most often is paired with a below market value listing price. This tactic is often chosen to attract more buyers with the aim of generating multiple offers and drive up the potential sold price.
If you do run into an offer night on a home you love, here is what to expect and how to *hopefully* put in the winning offer.
Research Comparable Homes
You want to know what the comparable homes have been selling for before deciding how much to offer. It is important to do this research with your real estate agent so that your offer makes sense according to how the market is moving. The sellers have definitely done this research and have a minimum amount that they want in mind. If you go too low, you run the risk of losing to another offer; too high and you can easily go far above the market value. The trick is knowing the market value and establishing a competitive offer working around that number.
Make The Initial Offer Attractive
An offer without conditions will usually win over one with, unless it’s a lot higher than the others. Going in with a firm offer will make you stand out, and so it's important as a buyer to do your due diligence prior to offer night. Speak to your mortgage broker about the home specifically and the specific risks associated with going in firm, and book an inspector into the home prior to offering. You can also consider going in with a higher-than-average deposit to show financing won’t be an issue.
Be Ready to Go
One of the most important things that I tell all my clients when house hunting is to be ready to put an offer together quickly and get your pre-approval before your start the search. You want to be ready to offer with confidence as soon as you start the home search process in case you come across something you love. This is especially true when you come across a home with an offer night and being ready to go may even incite you to consider a bully offer– a pre-emptive offer before offer night that's high & convincing enough to make the sellers want to just take it. In a hot market, it can sometimes be the only opportunity to secure a home. Moving fast and moving smart.
When it comes to an offer night, you want your offer to stand out to make it easy for the sellers to say yes. If you need advice on how to get your offer to the top of the pile while not overpaying, please reach out, I’d love to chat!
