When I started working in real estate sales in 2003, I was no stranger to bidding wars. In 1996, I had a bidding war on the first house I ever sold. In the five years before I got my real estate licence, I worked as an admin assistant for 3 friends at RE/MAX Hallmark Realty Ltd. If there was to be a bidding war for one of our buyers, then certain parts of the offer, like the price, were left blank. The price would be filled in that night by hand when a buyer’s resolve was challenged. How competitive a spirit did that buyer have? How many competing offers were being presented? How hard was the agent willing to push to client to convince them that paying way over asking was the right thing to do?
My first really big bidding war
Took place in 2007. The property was on DeGrassi Street in Riverside. Surrounded by many homes from the Victorian Era, this home however was built in 1999 with a facade that could blend into the neighbourhood. Three storeys, a high and dry basement apartment (think extra income), no creaky hardwood, with parking and 200 metres from Bonjour Brioche. The finishes in the kitchen were middle of the road, so my client agreed to make a few upgrades. He added a mosaic tile back splash and a black granite counter top which looked amazing next to the maple kitchen cabinets!
Then we went searching for art – not something you get at Homesense – but a real one-of-a-kind original painting! Our first and only stop was the Art Gallery of Ontario Art Sales & Rentals. We had three paintings delivered and installed the next day. These three pieces added an amazing finishing touch to this home! When I look at the photos today, I would say that the house looked too austere. But when you were in the house, it didn’t feel that way. It felt warm and inviting!
Deciding on the price
The first question I ask all clients today, I asked my client back in 2007: what selling price would make you really happy? He told me that if this property sold for $550,000, he would be thrilled. I had already done my research. Was my client being overly optimistic or was I being bearish on the market? There were no listings to support this price. Nothing comparable! I showed him the most recent sales. So we agreed to sleep on it and make a decision the next day.
We decided on $550,000 with the understanding that it was pushing the envelope, and if we there were no offers on that night, we would wait a week and then discuss a price reduction. But once the house was put up for sale on the MLS, the phone started ringing! Over the course of 5 days, there were 38 appointments booked. I decided NOT to hold an open house to ensure that those who were really interested would have their agent show them the property. I spoke with one agent who was in the house with her clients shortly after 2 pm on the Saturday. She had left the door unlocked. She told me that people started coming into the house shortly after thinking there was an open house. Once they all left, the door was locked. Ten minutes later, she heard some knocks at the door and went to investigate. She said, “I thought it could have been a colleague who had an appointment and since I had the key with me, I went to the door and opened it, only to find several people wondering if they could come in for the open house.”
Showtime! Let the Bidding War begin!
On Monday night, we had ten offers to review. TEN! As was the tradition in Toronto at that time, agents would present their offer to the seller in person. I had been the listing agent in a bidding war situation, but never with this many offers. I had no idea what to expect. Upon meeting each agent, we would shake hands, & I always thanked them for the work that went into putting an offer in writing. Everyone was polite and well-mannered. No one was pushy.
The first five offers were slightly over the asking price. The next agent to come in was a friend who I knew to be very competitive and was often the winner. After she sat at the dining room table, the first words she said were, “I’m so sorry, but this is all I could get my guys to pay. I think its worth more but some days…..” Meanwhile, it was the best offer we had seen so far – $40,000 OVER the asking! A few more agents presented but they were not close to being over $590,000. And then it happened. The last two agents brought the exact same offer! No conditions, same closing date, same price. Both exactly $100,000 above the asking!! I was floored. Nothing in my research could have predicted this.
What does Poker have to do with a Bidding War?
Before the night began, I had explained to my client that in a bidding war situation, we had to have our best “Poker Faces” on. Our faces could not reveal what we might be feeling inside if we were surprised with a really high over asking offer. The outcome suggests that we did!
I had never been in this situation before. As a buyer’s agent, I had been asked to come back with a better offer many times. Not really knowing what the other offers included, I often felt that I was being lied to. BUT in this situation, I had no qualms about telling these two agents, that both offers were identical. Could they speak with their clients and ask if they would like to improve. Both agents returned. Both had improved offers. One offer was distinctly better than the other.
With an accepted offer over $650,000, I had one very ecstatic client. We walked over to Joy Bistro and had some bubbly to celebrate!
How’s the Market in Toronto today?
Today, the Toronto real estate market continues to bring higher and higher prices. Bidding wars continue to occur. The last six years, we have witnessed fewer listings year-over-year, more sales year-over-year, and rising prices year-over-year.
And as you can see, bidding wars from the seller’s perspective can be a bit of a crap shoot. You just never really know what will come your way.