Should you disclose offer amounts to potential buyers?
Last updated on August 13, 2024
We know the real estate market is under pressure, with properties selling above asking and sellers receiving multiple offers. This has led to a debate on transparency: should the amount of offers be disclosed during real estate transactions?
As you may recall, the current tension in the market comes from an imbalance between offer and demand. As long as there are few properties for sale and many active buyers, prices will continue to rise and selling times to shorten.
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Summary:
- How to receive multiple offers to purchase?
- The regulation for real estate agents
- To each their own strategy
- Discover the two different ways to proceed
- Which is more profitable?
- A transaction with a personal touch, at your own pace
- FAQ
How to receive multiple offers to purchase?
In Quebec, standard practice is that the selling party generally cannot accept several offers to purchase simultaneously, unless a specific provision to this effect is included in the conditions of sale. The selling party has the right to accept several offers, but concurrently, not simultaneously. Each offer is conditional on the cancellation of the previous offer. The parameters must be clearly defined in each offer to purchase.
Response time and priority for offers received
If the selling party receives offers within a short period of time, it is in a multiple-offer situation. It must choose a single offer and keep the contact details of the other buyers if the chosen offer does not materialize. It can also accept a second offer conditional on the cancellation of the first for non-fulfilment of the conditions. Each subsequent offer is conditional on the cancellation of the previous offers. The buyer must know what position he is in. Transparency and good faith are essential.
Accepting an offer to purchase: caution in declarations
When the selling party receives a second offer and the first offer, which has been accepted, is conditional on the sale of the property by the first buyer, the 72-hour clause applies. If there is no condition of sale, the second offer may be accepted by the seller and will be conditional on the cancellation of the first offer already accepted. In this situation, the second buyer waits for the seller to notify him of the cancellation or maintenance of the first offer, within the time limit specified in the offer to purchase.
The regulation for real estate agents
Under the Real Estate Brokerage Act, agents are obligated not to disclose the amount of competing offers to purchase. But DuProprio clients, or other owners selling property by themselves, are free to disclose, or not disclose, the amount of the offers received from other potential buyers. Each seller is free to decide how to conduct the negotiations.
To each their own strategy
Naturally, every property owner wants to get the best offer possible, including the best price, but also the best selling conditions such as the right possession date and appealing inclusions/exclusions. In a market where sellers have the advantage, it’s the competition between buyers and the speed of transactions that are making prices rise. Ultimately, buyers must decide the maximum price they’re willing to pay for a given property.
Discover the two different ways to proceed
Here are two strategies that sellers can use when the offers come in, while making sure to respect the timelines included in the offers:
1. Decide to keep the nature of the offer confidential
The seller examines each offer and selects the most interesting.
2. Openly inform potential buyers of the best offer received
The seller may receive fewer new offers, but they will be competitive.
Which is more profitable?
Each of the above approaches has its advantages. For example, if you choose to maintain the mystery, you could receive an outstanding offer. On the other hand, if you choose transparency, you could reach an agreement with the buyers of your choice rather than seeing them bow out of the race under pressure.
A transaction with a personal touch, at your own pace
In a market where everything seems sped up, having the opportunity to establish a trust-based relationship with a buyer and having the freedom to choose how negotiations will take place are just some of the many advantages of selling without an intermediary. But most of all, you will not be pressured or hurried in your decision.
In fact, about 2 in 31 Quebecers surveyed consider that selling a property without an agent has never been easier than it is now!
Why the pandemic shook up the real estate market
FAQ
Can two bids be submitted simultaneously?
The selling party has the right to accept several offers, but concurrently, not simultaneously. Each offer is conditional on the cancellation of the previous offer.
How do I process multiple bids?
It is possible to accept a second offer conditional on the cancellation of the first for non-fulfillment of the conditions. Each subsequent offer is conditional on the cancellation of the previous offers.
Does an offer to purchase prevent visits?
When a purchase offer is made on a property, this does not prevent additional visits from being scheduled.
Looking to sell a property? Our team of customer service advisors, sales representatives, real estate coaches, appraisers and notaries is located throughout Quebec. With DuProprio, you have access to the visibility and support you need to succeed in your sales project! Learn more about our services by watching our short video or by calling us at 1-866-387-7677.
