REAL ESTATE COUNCIL OF ONTARIO

Consumer Publication

In certain market conditions ,consumers may find that more than one buyer is interested in a property. This is a competing offer situation and creates unique conditions in a real estate transaction. Both sellers and buyers need to consider how to respond when presented with a competing offer situation. Working closely with your real estate broker or salesperson will ensure that you understand the process.In Ontario, the seller's real estate broker or salesperson is required to disclose the number of competing offers to all buyers who have submitted a written offer. However,the terms and conditions of each offer are confidential to the seller and their broker or salesperson.

WORKING WITH A REAL ESTATE BROKER OR SALESPERSON

The seller's real estate broker or salesperson represents the interests of the seller in the transaction. The decisions about how offers are presented and responded to, as well as which offer is accepted, are made by the seller.The buyer's real estate broker or salesperson represents the interests of the buyer in the transaction. The buyer makes the final decisions related to their offer,including the important decision of whether or not they want to participate in a competing offer situation. In some situations,the real estate broker or salesperson will represent the interests of both seller and buyer or multiple buyers. Consumers should seek guidance from their real estate broker or salesperson if this situation arises.

TIPS FOR BUYERS

In a competing offer situation,buyers may be tempted to offer more for the property than they planned to and/or remove conditions from offers that are intended to protect them. Before participating in a competing offer situation, buyers should consider factors such as:

OFFER PRICE

How much can the buyer afford to offer for the property and how much is the property worth? A high offer could enhance the buyer's chance of success. However, it may not be the best long term financial decision for the buyer. A competing offer situation does not necessarily mean that a property will sell for more than the asking price. Similarly, an offer that meets or exceeds the asking price will not guarantee that a buyer's offer is accepted

FINANCING

Buyers should be aware that pre-qualifying for a mortgage does not safely eliminate the need for a financing condition in an offer.

HOME INSPECTION

In competing offer situations, it can be tempting not to include a clause in an offer that makes it conditional on a home inspection. While your offer might be more acceptable to the seller, you may later learn that there are property defects, required repairs or needed upgrades that you weren't aware of. In some cases, this inspection is a significant risk that a buyer needs to carefully consider.

The Buying Checklist

Buying a home is a big decision -whether it's your first home or a vacation home. To help you make smart decisions, it's important to think with your head and not your heart. The real estate council of Ontario (reco) shares their tips for being home smart when you're in the market to buy.

DO YOUR HOMEWORK

Get informed about the buying process, before it begins, to save time, hassle and money.

PROTECT YOURSELF

Make your offer conditional on mortgage financing, a home inspection, the sale of your existing home,and/or other factors that are important to you. These conditions provide you important protection as a buyer.

SHOP AROUND

Don't be tempted to hire the first real estate professional you meet.Make sure the fit is right, check their references and visit the RECO website to confirm their registration.

CHECK WHAT'S INSIDE THE WALLS

Ask your real estate professional to look into the age and condition of the home's systems, such as the plumbing and electrical. Find out if proper permits were pulled for any renovations. Consider a home· inspection to further examine the home and don't hesitate to ask questions.

GET IT IN WRITING

If your real estate professional offers you rebates or incentives, they should provide the details in writing.

UNDERSTAND WHAT YOU'RE SIGNING

Before you sign a buyer representation agreement, make sure you know what it means, how long it will be in effect and what the different clauses mean. Ask questions and seek independent legal advice if you'd like a second opinion.

BE SPECIFIC

Make your offer as detailed as possible. outline what will be included with the sale (e.g., appliances and light fixtures) and be clear if certain renovations need to be completed, based on the home inspection.

KEEP BUDGET IN MIND

Remember to include legal fees, land transfer tax, mortgage insurance and utility hookups in your total cost.

PLAN AHEAD

If you encounter a bidding war, enter with a strategy. Set ground rules in advance about what you want from a home, what you're willing to spend and what conditions must be met Once your rules are set, stick to them.

KNOW THE COSTS

Of a home inspection and home appraisal or survey.

WHEN THERE ARE COMPETING OFFERS

It can be tempting to waive your conditions (such as a home inspection). Think twice before doing this.

MOVING COSTS CAN VARY

Based on volume, distance and whether you hire a professional mover. Have wiggle room in your budget to cover the cost.

EXPECT THE UNEXPECTED

Does your closing date on your new home align with when you need to move out of your existing home? Have a contingency plan in place in case the dates don't match up. A registered real estate professional can help you navigate the many steps and decisions involved in the home buying process.

Selling Checklist

Whether you're moving to accommodate your growing family or looking for a smaller space to be your empty nest, selling your home is a big decision.To help you make smart decisions, it's important to think with your head and not your heart. The Real Estate Council of Ontario (RECO) shares their tips for being home smart when you're looking to make the sale.

SHOP AROUND

Don't be tempted to hire the first real estate professional you meet. Make sure the fit is right, check their references and visit the RECO website to confirm their registration.

UNDERSTAND WHAT YOUR'E SAYING

Before you sign a listing agreement with the brokerage, ensure you know what it means, how long it will be in effect and what the different clauses mean. Ask questions and seek independent legal advice if you'd like a second opinion.

SHOW THE FACTS

Include all your home's details in the listing, from the square footage to recent renovations to items that are and aren't included ( water heater, appliances, drapery etc).

PLAN YOUR OPEN HOUSE WISELY

Be proactive

Speak with your real estate professional before the open house to set ground rules and identify ways to protect yourself and your property.

Minimize risk

Remove all valuables and securely store anything with your personal information, like credit card statement and receipts

KNOW YOUR OPTIONS

When reviewing offers on your home, the details of the offers will remain confidential between you and your real estate professional You may get multiple offers, and your real estate professional is there to help you make the best choice.

BUDGET ACCORDINGLY

Remember that there are closing costs associated with selling a home: real estate commissions, legal fees, moving expenses, and more.

EXPECT THE UNEXPECTED

Does your closing date on the sale align with when you'll be moving into your new home? Have a contingency plan in place in case the dates don't match up.

A registered real estate professional can help you navigate the many steps and decisions involved in the home selling process