The Ottawa real estate market is crazy hot right now. Inventory is at a historic low, and we are seeing multiple offers almost everywhere. The speed with which properties are selling has created a situation in which most of us are holding off on offers for our listings for at least a few days.
A story in today’s Ottawa Citizen calls that a “high pressure sales tactic” that is forcing buyers into quick decisions, and describes it as cut-throat. It adds:
High-pressure sales tactics such as “offer nights,” where realtors accept blind bids within a short period of time, are putting buyers at risk.
So let me just unpack that a little, because these statements are unfair and mistaken.
My obligation to my seller is to get as many people through the door as possible so that I can get them top dollar. In this kind of market, if you are acting for the seller and don’t hold off on offers for a few days, any decent property that is reasonably priced will sell within a few hours of being listed, and long before it even hits tRealtor.ca. This is because there is a delay in uploading information from Matrix (our back-end to Realtor.ca) into the MLS/Realtor.ca system.
If we didn’t hold off on offers, the only successful buyers would be those whose realtors could get them in the door within the first few hours of a listing going live. It’s frustrating to have a buyer call me about a new listing they saw on Realtor.ca and have to tell them it’s already sold, and often with multiple offers.
By holding off on offers, I at least give all interested buyers a fair shot at seeing the property and a fair chance at getting it. (And yes, the bids are blind, because our governing legislation requires that terms and conditions of an offer be kept confidential. If you want an open bidding system that works like a regular auction, where everyone knows what bids are, lobby your legislators to change the REBBA legislation. Until you do, blind bids are required by law.)
The article blames realtors for pressuring buyers into making quick offers without doing their due diligence when it comes to home inspections:
As bidding wars over real estate in Ottawa intensify, some home inspectors say buyers are under increasing pressure from realtors to make decisions under tight deadlines without doing their due diligence.
Now, no realtor that I know would ever urge a buyer to remove a home inspection condition. In fact, a prudent realtor includes the home inspection condition in the offer and requires the buyer to strike it out and initial it if they decide to waive it to make it very clear that they are doing so knowingly.
I have only had one buyer insist on waiving a home inspection clause in an offer this year and that was against my strong advice to have one. Believe me, I felt almost sick when my buyer told me she wanted to waive the inspection. Our unconditional offer was accepted and I arranged with the seller to let us in to have an inspection later that week: we were lucky and nothing serious turned up. Far from pressuring our buyers, then, we tell them the risks and let them make adult, informed decisions.
The story quotes the President of the Ontario Home Inspectors Association, Murry Parish as follows:
To protect buyers in a hot market, Parish suggested the seller should be the one paying for a home inspection before listing a house.
That doesn’t protect the buyer: that protects the seller!
Some sellers do get home inspections, but the contract for the inspection is between the home inspector and the seller, not the buyer. If the home inspector misses something, the buyer has no privity of contract, they can’t sue. So the buyer who relies on a seller’s home inspector takes a big risk: they really should have their own inspection if they want to be protected. At least when we hold off on offers, that gives our buyers the time to do so.
The home inspector quoted in this article, however, claims that “good inspectors are usually booked seven to 10 days in advance, so squeezing in a last-minute appointment is difficult.”
First of all, I can’t imagine any seller agreeing to give a buyer a fulll ten days to get a home inspection done in a hot market or a cold one- they would never tie their property up that long. We usually get inspections done within a few days, regardless of market conditions. And secondly, there are hundreds of home inspectors in Ottawa, so there are plenty of good ones available on short notice.
So take this article with a grain of salt, please. We are not at fault for market conditions (see my previous post on why the Ottawa market is so hot). Despite what this article says, we are doing our best to work hard for our buyers and sellers in a very tight market.