So, you have decided to sell your house and, of course, you want the most money possible. This leads to the subject of holding offers. We have all read, heard, or lived the stories about people holding offers and getting bidding wars on their houses, which lead to them getting some huge sum of money—more than they were even asking. Who wouldn’t want a bidding war when they are selling? However, things are not that simple.
The decision on whether to hold offers cannot be made in a vacuum. It is part of a larger pricing and marketing strategy to discuss with your real estate agent. There are many factors that require consideration, some of which you have control over and some of which you do not.
Are market conditions right for holding offers?
The first thing to consider is the market. At the time I am writing this, we have a seller’s market in the Durham region, and the GTA. This means that there are more people looking to buy than there are looking to sell.
Some characteristics of a seller’s market are:
- Low inventory of houses for sale
- Houses are selling quickly
- Home sale prices are escalating
- Buyers have less negotiating power
- Bidding wars
Holding offers is more common in a seller’s market. If it is not a seller’s market, holding offers should only be done in rare, specific situations.
Is your home right for holding offers?
Another factor to consider is the desirability of the specific house for sale. This is more about mass appeal than about the house itself being desirable. A big, beautiful, expensive house may be desirable, but might not have mass appeal, because the vast majority of people could not afford it. Therefore, this factor is about determining the market for your particular house within the greater market.
If your home is desirable, and the market is desirable, the third factor to consider is the price you set. If your goal is to spur on a bidding war by holding offers, you should have either a competitive or an aggressive price. If you attempt to list it high, just to see if you can get the high selling price, then holding offers may not be the right strategy.
In the right market and conditions, holding offers is a no brainer, and can be a great strategy for maximizing the sale price of your home. It helps to maximize the exposure you get, ensuring the greatest amount of potential buyers have a chance to see and make an offer on your home.
In the wrong conditions, you can turn off a potential home buyer. This can cause your home to take longer to sell, and possibly make you settle for a lower price. Losing potential buyers could cost you time and money.
To summarize, the answer to whether or not you should hold offers on your house is, it depends.
We would be happy to help you understand the factors in your situation and develop a pricing strategy that makes sense for you and your home in an ever-changing market.