How high will they bid?

There’s a date for offers

It’s been a fixture of the Toronto real estate scene for about twenty years. A new listing comes on, folks stream through the open house. The number one question… “When’s the offer date?” The surprise is how few buyers actually have a sense of the statistics behind multiple offers.

Do they all sell in multiples?

Multiple offers frequently make up more than half of the sales in “hot” downtown areas. In other parts of central Toronto, between 25% to 40% of sales go over asking during busy times of the year. In quiet times, or in “sleepy” areas (if you can find one), the percentage of multiple offers can fall to about 10% of sales.

How high do they go?

If you’re going to take part in a bidding war, this is an essential statistic that your agent should give you for your specific market niche. The chart above is based on 40 central Toronto houses that sold in multiple offers last week. Half of those bidding wars produced a sale price less than 10% above the listing price. But another third of them actually went 16% or more over.

Do your homework

Play out the scenarios: if two people are bidding, how high could it go? What about six people competing? As a rule of thumb, the more buyers attracted to a property, the higher the final result will be.

At the end of the day, don’t forget that other group of potential sales waiting for you to discover them… the ones that won’t go in a bidding war. They just need that “one” buyer.

If you’re thinking of selling your home or purchasing one, a good agent will provide guidance on pricing and timing strategy. We’d be happy to help. You can email us, or feel free to call James and Joanne at 416-483-8000.

GTA Market Update – May 17, 2013

The Magnolia Effect

Average resale home prices in each of the first two weeks of May moved into record territory. In 2012, the spring peaked in April – but this year’s pattern may be more typical for the season.

The past two weeks have seen the city’s parks and front yards bursting with flowers. Even urban hipsters have been posting mobile uploads of magnolias, tulips, and wisteria! It’s not rocket science to imagine that the sudden greening should have an effect on home sales.

What happens next

Using past years’ behaviour as a guide, the next few weeks may shift over to a more balanced market – or at least, a less-lopsided one. If new listings continue to come out into June and July, buyers may find that they have some choice!

If you’re thinking of selling your home, a good agent will provide guidance on pricing and timing strategy. We’d be happy to help. You can email us, or feel free to call James and Joanne at 416-483-8000.