What is Offer Night? If you've been home hunting in the greater Toronto area you might have come across the term “Offer Night”. Offer night in real estate is the evening which all interested buyers come forward and submit their best offers to the sellers (and their representative) potentially leading to what is known as a bidding war.
For the past few years, it hasn't been uncommon to see homes selling for 100s of thousand over asking price in the Greater Toronto Area (GTA). Why? because of offer night tactic, which usually involves listing a home for sale at a price point below market value to attract more potential buyers. Then have them bring in their best offers on the same day, bidding against one another until the best offer gets the prize - the home.
In some instances, properties can receive over 20 offers on their "offer night", so how do you make you offer stand out from the crowd? If you really want to make sure your offer stands out amongst the array of other offers, here are four tips on how to improve your offer:
1. Take a good look at all comparables that recently sold
In most cases, the most important variable in the equation is ultimately the sale price. So make sure to have an idea of what is expected from the seller because they probably already have a min/max number in mind. Since some of these properties are already priced a significant amount below the averages - it might seem hard to determine what the true starting point of your offer should be. However, a word of advice, if you really like the home, go in with your best or at least 2nd best offer because you may not get a second chance.
If you're buying with Dwelly, your buyer's rebate is based on a % of the final sale price (usually 1.25%) so the higher your offer is, the bigger the rebate becomes. That might just give you the freedom to bid even a little more.
2. Increase your Deposit
Although not always the determining factor, going in with a large deposit shows the sellers that you are serious about acquiring the property, giving the perception that there is a slim chance of pulling out of the agreement (if it's a conditional offer, see below).
3. Going in with a Condition-less Offer
Going in with a firm deal makes an offer really stand out. When submitting an offer there are a number of conditions that you usually would include in the Schedule A of your offer. The conditions added are for your benefit, they usually allow you to get back your deposit if anything regarding the condition is not satisfactory (e.g. problems arose during the home inspection). So by removing these conditions you are putting yourself at a greater risk.
However, it's very common to have offer nights that have everything prepared before hand. So if it's a Condominium you might be able to a get the Status Certificate beforehand and have it reviewed. If it's a house, the inspection report might already be prepared by the seller through a professional home inspector.
Examples of Common Conditions / Contingencies:
- Arranging financing or a Mortgage,
- Inspection of the property,
- Review of the Status Certificate (if a condominium), or
- Lawyer's Approval
Here's an example of a mortgage condition:
"This Offer is conditional upon the Buyer arranging, at the Buyer's own expense, a new first Charge/Mortgage satisfactory to the Buyer in the Buyer's sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller not later than 6:00PM p.m. on October 21, 2019, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction."
4. Know the Competition
By knowing how many offers have been submitted, you can get an idea of how competitive the offer night will be. Usually all the offers have to be submitted by a particular deadline (e.g. Register Offer by 5PM) and the listing brokerage would notify all the other interested parties each time an offer is registered. So by holding off submitting the offer until the last few minutes you can figure out how many offers have been submitted so far, and maybe even change your offer based on this new information. How many offers can it get to? You can never really know, some offer nights end up with no offers at all and some that end up getting 20+ offers, but one thing is clear - the more offers there are, the higher the sale usually becomes.
We hope you can take these tips and come out with a winning offer. If you have any questions or would like us to help you with an offer night please feel free to message us via our Live Chat on Dwelly.ca.