Once you own a property, you are never the same again. You are invested. Not just in the obvious financial way, but in a way that you couldn't quite wrap your head around before you owned property. You are more curious about your neighbourhood. You become excited when a new restaurant or coffeeshop or baby gear store opens up within walkable distance. You keenly pay attention to real estate articles, blogs and gossip. Instead of feeling terror and disappointment at the rise of property values, you most feel a little giddy, even proud of price appreciations in your neighbourhood or condo building.
Of course, there will come a time when the home owner or investor will choose to let go of their beloved property. Sometimes you need more space. Sometimes you need less space and less maintenance. Sometimes you meet someone with whom you would like to share property. And sometimes you discover you may be better off on your own, or maybe with someone else. Whatever the reason is, when it comes time to sell, sellers want to receive the best price possible.
Though there are many different strategies to arrive at the best price, many sellers these days would like to see their property sell in a bidding war. And really, who could blame them? What's not to like about buyers competing to buy your home? The thing to remember, however, is that not all homes sell in multiples. Still, this selling strategy has a lot of appeal to sellers right now.
During chats with neighbours over fences, in elevators or while leafing through the paper on their own, most sellers gravitate to those stories around bidding wars. Why? Well, because it's a rush to know that a house could sell for way over the asking price. When there are multiple offers on a home, it does lead to the best stories - drama, suspense and possibly a little shock or disappointment. So, if you want to sell your place, the question becomes: Is setting your property up to sell in a bidding war the best way to sell your home? Do you need the drama? Does it always work?
If you do feel like this may be the best route for you as as seller, then you need to do your homework on your neighbourhood or building. Receiving bidding wars on a property is no guarantee. If you are keen on setting up your home for a bidding war, you may want to consider these things:
1. Get an agent who knows how to market your home. Don't go for someone who is just going to put your property on the MLS .You need someone who will really market it.
2. Know thy competition - Know the other houses in your area. Which one are receiving multiple offers? If it is the staged ones, you will need to do some work to prep your place. If your home is nothing like the properties receiving multiple offers, then you may want to reconsider.
3. Look at the culture of your neighbourhood. Some condo buildings don't have bidding wars at all. So, it may be weird if you try to buck the trend. Some neighbourhood have bidding wars constantly. Some have very few. Know your building or neighbourhood well.
Still feeling you want to try the bidding war option? There are two different approaches to selling in a bidding war. One is that you list your home lower than market value in order to drum up as many offers as possible. With this method, you could potentially receive several offers that would send the price of your home above market value. On the flip side, you could receive no offers, and then your property looks like it can't even sell at the low price. It can be risky.
The other, less risky, way is to list at market value and hold back a week. This way the property will have a full week of exposure for marketing. If you receive list price, then you're happy. If you receive more, even better.
Whether you are planning for multiples or not, you need to prepare. What happened six months ago is not relevant. Bidding wars do come in and out of favour. Buyer do go through periods of bidding war fatigue. Remember, it may be exciting and story-worthy to sell in a bidding war, but at the end of the day, you need to pick a strategy that will sell your home for the best price reflective of the current housing market, whether that's in a bidding war or not.