Selling over the asking price: how to prepare, negotiate and decide
Published on December 7, 2020
In a market saturated with buyers and not enough properties for sale, sellers are in a position of power. If their type of property is in high demand, they can expect to receive multiple offers to purchase in a short amount of time.
Overbidding is when one or more buyers offer a price that is higher than the asking price. There’s no need to panic; these offers to purchase are handled the same way as regular ones. So you can start putting your property on the market with confidence and even a little excitement.
Set a deadline for receiving offers
Since you don't have any control over what buyers will be willing to pay for your property, the goal is still to set a fair and realistic asking price. This will help you attract serious buyers who are looking for your type of property.
As soon as you put your property on the market, you will have an idea of the interest in your product. For example, you might quickly receive several requests to visit. Different strategies can then be applied.
“You could inform those interested that you are accepting offers to purchase until a certain date and that you will not be making any decisions until then,” suggests Martin Desfossés, real estate coach at DuProprio. “You could also wait to receive a first offer and then ask those who have expressed interest if they want to make one, too, letting them know when you will be making your decision.”
Agree on a response time
The first rule when you receive an offer to purchase—one that applies at all times—is to agree on a response time with the buyer. It may be preferable not to immediately accept an offer, either verbally or in writing. Some reflection time will allow you to consider the offer or compare all the offers made.
“You can take advantage of this time to contact one of our notaries or a notary in private practice, who will answer your questions about the contract's different clauses. This step will help you conclude the transaction with complete peace of mind,” advises Elena Maria Bejan, notary at DuProprio.
Request a better offer
As long as you have not accepted an offer, you can ask each of the contenders if they want to increase their offer. All the terms can be changed: the price, the conditions, the closing date and the occupation date. If the buyers are not already offering more than asking, this could tip the scales.
In this respect, it is in your best interest to ask potential buyers for a letter stating that they have been prequalified for a mortgage. It proves that they will be able to pay the amount you are asking (or more, if overbidding).
Choose the offer that makes you happy
All you will have left to do is choose the offer that meets your needs, if there is one, and to give your buyer the good news. You can then inform the non-selected buyers of your decision. “Since sales don’t always go according to plan, ask them if they want to be informed if the accepted offer should fall through at any point,” recommends Martin Desfossés.
Finally, if you accept an offer to purchase that has been raised, keep verbal or written proof of the changes made. The initial offer and this proof of increase will form a single contract. Otherwise, it is possible to fill out a new form containing all the terms of this new agreement.
To find out how our team can help you in the sale of your property, call us at 1-866-387-7677.
