Bidding Wars starting to backfire in Toronto?

The bidding war phenomena in real estate has become the norm in Toronto, it has even made its way outside the city. Not only have I seen it in Richmond Hill I have experienced it both as a seller and buyer. In this market climate, bidding wars can be an amazing situation for the seller and a horrific experience for the buyer. Amazing because the seller gets to hand pick the best offer from buyers who are willing to come with a firm offer (and usually overpay in order to be the lucky ones chosen). But sometimes the strategy can backfire for the seller, which almost happened to me this week.

Ten days ago our brokerage listed a beautiful semi-detached home in the hip and trendy Leslieville community. One week after listing it below market value (on purpose) we had over 80 different visitors come through. No that's not a typo...80 different visitors either with an agent or during the three open houses I held. And everyone who came in had lovely things to say and felt the home was going to be an easy sell and a traditional Leslieville bidding war scenario. A few local agents even felt that I could expect up to 15 offers! Now I know better than to make grand statements like that because in real estate you just never know, but I too was feeling pretty good given the interest we had and the repeat buyers that visited. Plus we had an amazing marketing campaign for this home. A stunning virtual tour, a favourable pre-home inspection by Carson Dunlop, beautiful brochures, feature sheets, a social media campaign and even door to door postcards inviting the neighbours to visit.

So here comes offer night and wouldn't you know we received only two. That's right...two! After all that traffic and great feedback only two came in. I was shocked as were some of the other agents that called to enquire about how many offers were submitted. And after speaking with over 15 agents who had clients who were 'somewhat interested' in the home most said their clients were ''tired of bidding and losing out'' and decided to ''not get involved with another bidding war for a while''. Yup, they were emotionally exhausted going through that process...and if you haven't gone through it you probably can't relate to this but trust me it is not fun. Getting your hopes up, offering sometimes $80,000-$100,000 above asking price, coming in with no conditions and still losing by a few thousand dollars? Do that 3-4 times within a month and you too will want to wait on the sidelines for a bit.

Fortunately the two that were willing to fight it out came in with really good offers and we sold firm that night, but I must admit it was an eye opening experience for me, and hopefully other agents will think about this scenario when it comes time to listing a home in Toronto. Buyers are willing to pay top dollar for what they want but shatter their hopes and dreams a few times and don't be surprised if they pass your home by for no other reason than the 'bidding war' fiasco.

“A broken heart is just the growing pains necessary so that you can love more completely when the real thing comes along.”

J.S.B. Morse, Now and at the Hour of Our Death