Question: A home in North Toronto recently received multiple offers, but accepted none and instead relisted at a higher price. Why is that allowed?
Here is the thing people need to understand when faced with a real estate market like this one. Listing prices are meaningless. They are the small talk at a dinner party. The Maple Leafs banter around the water cooler before the meeting starts. Sure it might set the tone, but at the end of the day, it’s just talk.
Price is one way to market a home. Setting a lower than expected listing price can attract a wider audience of potential buyers. Bringing in more buyers is a good thing. Competition is what increases the price of a home, just like the price of anything in a market economy. It is all about supply and demand.
According to the Real Estate Council of Ontario (RECO), an organization that provides the rules and regulations to the industry, there is nothing to prevent this occurrence.
“In a hot housing market, there are more buyers than sellers, and it’s understandable that buyers can become frustrated. It can be especially upsetting when a buyer submits unsuccessful offers on several homes,” said Kelvin Kucey, RECO’s deputy registrar, regulatory compliance.
“But it’s also important to see this from the seller’s perspective. By listing a property, the seller isn’t promising that they’re going to sell it. They’re inviting interested buyers to submit offers that they will consider.”
Melanie Wright is team leader at Wright Sisters Group real estate, and they deal with a lot of multiple offer situations.
“It’s very common, easily three-quarters [of sales], more even,” she says, noting that it is just the way business is conducted at this point, and failure to follow the trend would mean doing the seller a disservice.
According to Wright, far less common is the situation where a seller doesn’t get the offers that were expected and for one reason or another decides to take the house off the market. But it does happen regularly.
“It’s the seller’s prerogative, and as an agent, I can’t force them, and there are no rules that say they have to,” said Wright. “It’s not always about price. There could be other factors such as the closing date or something else in their life. It’s allowed, but it is unfortunate and frustrating for buyers.”
It’s also important to note that when a seller receives multiple offers, they can pick any one of them — they don’t have to choose the one with the highest offer price,” said Kucey. “And they can also decide that none of them are to their liking.”
