You Will Not Win In Competition Without The “Best” Offer


7 minute read

April 5, 2017

Have you ever read one of my blogs where I take something great, or special, or touching, or optimistic, or just a nice break from the cutthroat world in which we live, and then I turn it on its head?

This is going to be one of those blogs.

Everybody is talking about last week’s Toronto Star article about the family who “won” in multiple offers despite the fact that there was, supposedly, an offer of $150,000 more on the table.

Let me be “that guy” and tell you why this is one-in-a-million shot, and how things usually go down on offer night…


Did you read the article?

As far as today’s blog goes, I only need refer to the article as, “the article.”

There’s only going to be ONE article about a family buying a house in the 2017 G.T.A. market for significantly less than the highest offer.

And as far as water-cooler conversations have gone in the past week, about real estate, this is “the” article.

If you have no idea what I’m talking about, read this:

“A Family Bid $150K Under The Highest Offer On An Oakville Home And Still Got The Sale.  The Reason Will Leave You Heartened.”

And if you’re too lazy to read, well, I’m sure the headline is sufficient.

The story is great, I’m not going to lie.

Read it, and you may feel slightly better about mankind, if only for a moment.

But since I live in the real world, and not a fantasy one, I figured I’m well-qualified to explain to you why this won’t happen again.

Lightning doesn’t strike twice in the same place.

Unless you happen to be this guy:

And that’s a fake video.  So even when lightning does strike twice in the same place, there’s bound to be a red flag.

So with the Toronto Star story from last week, can’t we just assume this comes with an asterisk?

I have no doubt that the story is true – that the sellers really did accept an offer that was $150,000 lower than the highest.

But the way the story is written, and the way it’s being shared on social media and even in the mainstream media, is giving people false hope.

I mean, just look at the headline, which adds, “……THE REASON WILL LEAVE YOU HEARTENED.”

It reminds me of those click-bait ads that litter the sidebar of websites we frequent, like this:


Or this:


Well, I guess there’s a lot of competition for your interest and attention among the media these days, so perhaps I can’t blame The Star.  And I know from my days writing for “The Grid” that the columnists don’t write the headlines.

I know many of you will agree with my opinion in today’s blog, but many you will also think I’m somehow taking away from the greater good by dumping on the contents of that article.

But come on – as soon as you saw the line, “After six weeks of missionary work in Uganda last year,” did you really need to continue reading?

I wish this was the world we lived in, and I wish this was the market we operated in.

But it’s not.  Not even close.

There’s bound to be some NIMBY’ism here.

You can say, “David, I think that’s a fantastic story, and there’s no reason for you to dump on it,” but if you’re not willing to turn around tomorrow and sell your house for $150,000 less than the highest offer, well, then maybe you don’t have a leg to stand on.

Because in reality, I have never, not once in 13 years, seen a seller-client take less money on offer night.

Less money, with a qualifier?

Sure.  It’s been known to happen, and let me me explain why.

Let’s say you have an offer on your condo of $420,000, conditional for 5-business-days on financing, and you have an unconditional offer of $410,000.

You could take the $410,000 offer, and you might not be wrong to do so.

Let’s say you have an offer on your house of $1,110,000, with a $150,000 certified bank draft on the table, with a trustworthy, well-known agent sitting in front of you, and you have an emailed-in offer of $1,120,000, from an agent who didn’t present in person, said he’ll “try to get a cheque tomorrow,” and who’s website URL says “Page Not Found.”

You could take the $1,110,000 offer, and you would definitely not be wrong to do so.

So there are situations where you win without the highest offer, but those have qualifiers, or asterisks.

And in this market, most of the time there is no “picking” from the listing agent – there is only telling.

For example, in the first situation, where there is a $420,000 conditional offer, and a $410,000 unconditional offer, I don’t believe the listing agent would “pick” the $410,000, unconditional offer.  Nine times out of ten, the listing agent will go to the agent with the $410,000 unconditional offer and say, “Great news, we’d like to work with your offer!  You’re the second-highest offer, but if you’ll come up to $420,000, the property is yours.”

And nine out of ten times, the buyer will do exactly that – improve their offer, thus matching, or beating, the highest offer.

I’ve been writing these blogs long enough to know when most people are going to find fault, disagree, or in some cases – argue for how they want things to be done.

I feel like years ago, many readers would interject the worst word in the English language, “should,” and say something like, “I think the listing agent should take the offer of $410,000, and not gouge the buyer for more money!”

But when I think back to the most misunderstood, and misread blog I’ve ever written – “How To Handle Multiple Offers In 2017 (Pt2),” I was shocked to see all the readers that said, “You’re a nice guy, but if you wouldn’t rape and kill for me, then I wouldn’t hire you.”

Again, the NIMBY’ism is apparent.

People constantly say things like, “The price-gouging is disgusting!  Realtors and their bidding wars are criminal!”

But when they have their house for sale, it’s somehow different.

Point being, folks, the sellers portrayed in the Toronto Star story are truly one in a million.

And since that story broke, I’ve had clients asking me about sending photos, writing letters, and making personal appearances, and now I’m some sort of grouch when I tell them, “It’s a waste of time.”

This past week, a client emailed and asked if she could write a letter to the sellers, not only because of the Toronto Star article, but because a few of her colleagues at work had done this – and one even got the house for less money than another bidder!

Now I had to be the guy who told a child there is no Santa Claus, and inform her that (gulp!) people lie!

It’s true.  It’s one of the first things I was taught in real estate, and my God has it turned out to be correct.

People lie about anything and everything in real estate, when it involves a dollar amount.

How much did it cost to renovate your kitchen?

Well if you’re a pretentious snob, who competes with her friends, you tell her it cost MORE than it actually did, to somehow try to impress people.

If you’re like the rest of the world, and you value a dollar, you tell people it cost LESS than it did.  You also tell them it was easy, no delays, and you loved your contractor.

How much did you pay for your condo?

How much did you sell your house for?

How much did your agent, lawyer, and mover charge you?

How many offers did you compete against when you “won” on offer night?

How much did the listing agent love the cookies you baked?

Excuse the cynicism, but I speak the truth for a living, and always have here on TRB.

And over the years, I’ve seen the lies, and watched people – often my own clients, believe them.

So when my client’s colleague says that she paid less than another bidder on offer night, I’m sorry – but I’ve heard that one before a hundred times.  Because in the end, there’s no way to prove she didn’t, and it’s just too easy for her to make the claim.

I gave my clients some tough love, and I felt bad for it.  They’re such a cute couple, and they’re always brimming with optimism.  But I don’t allow my clients to hope and wish – it’s one thing I pride myself on.  I tell the truth, even when it’s inconvenient, or when it hurts.

And to take things one step further, I personally believe that in this market, the “letter from the buyers” can work against you.  It’s too easy for the listing agent to identify the buyer with the letter as the sucker, and go back to him or her for more money – even if they’re already the highest.

We bought that house on Tuesday night, FYI.  Without a letter.

The truth is, most sellers don’t care about the buyers.  Some do – and if you’re one of them, I encourage you to share your story below.  But most, from my experience, do not.

Many sellers in this market don’t even want to meet the buyer agent!

There are a lot of email offer presentations these days, as well as some cases where the listing agent presents the offers him or herself, to the sellers, after receiving them at the front door of the house from the buyer agents.

So look, the Toronto Star story was great, and I don’t want to take anything away from that (although you’ll tell me those words are hollow).

But my job in this market is to give you the straight goods.  It always has been.

And with the market appreciating as fast as it is, and with the speed at which properties sell, and the complexity of the offer process (not to mention the decision-making process for a buyer), I feel I would be doing buyers a disservice to let them think that they have a chance at getting a property, in this market, for “significantly less” than a higher, competing offer, because they’re nice people, or wrote a letter, or included a photo.

My father told me there was no Santa Claus, in July of 1986, in the parking lot of Armour Heights Public School, as I was about to board a bus to go to Camp Kawabi for a month.  I was younger than every other kid by two years (something my Dad thought would make me stronger, I suppose), but he didn’t want the other kids to make fun of me for thinking there was a Santa Claus.

Shoot the messenger if you want to.

But I think I just saved a lot of buyers, a lot of time, and many lost offers, by telling something they should already know: this market is all about money.

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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  1. IanC

    at 7:25 am

    I agree, but it made me think… It’s a LONG shot – but what if people are selling their house to their new neighbours!

    I knew someone who moved to the other side of a semi-detached house because of the renovations and exposure. My boss moved across the street on Shuter. As a kid, my next door neighbours declined an offer on their home for sale in Etobicoke because it was an investor who wanted to likely rent out and THEY were moving further down the same street to a more expensive house. I was thinking at one time about buying the unit right above mine that has a different layout and huge terrace. I would then be selling my place to my new downstairs condo neighbour. Someone in a small boutique building with no renters upgrading to a larger suite in the same building might not want to sell it to an AirBnB operator.

    I wonder what people would do if their BEST friend next door neighbours would be upset if you sold their house to a rowdy nasty buyer whose price was 5K above the others… Many would be like – “Been nice, smell ya later!”

  2. Tina

    at 7:38 am

    A house on our street sold last year to a family who claimed their kids really wanted to live in this area so they could attend the same high school as their friends. Their offer was $20,000 less then the highest offer. The sellers had kids of their own so they let their emotion come in play and sold to the lower offer for 1.35 m. The buyers moved in and those kids were all in their 20s and never saw any one walking with a back pack. They did some minor upgrades to the house and now 10 months later sold for a cool 1.9 M.

    1. BillyO

      at 8:21 am

      Haha I love it!

  3. M

    at 8:32 am

    When we bought our home in the Junction last summer, we wrote the letter and went all out – we love the neighbourhood, we volunteer in the area, newlyweds etc. We even included a picture with our dog. Our real estate agent was skeptical, but I figured there’s no way this letter is going to hurt me… it either doesn’t get read, gets ignored, or it helps. In the end, we got the house, for a few thousand dollars less than the next closest offer (but still 25% over asking). Why? Because the sellers moved a few houses down the street and wanted neighbours they thought they’d like, and didn’t want to see their home gutted by flip. It all worked out, but I think the letter would have done nothing without a highly competitive offer right underneath it.

    1. RPG

      at 9:40 am

      I agree with David on this one.

      “This letter can’t hurt me.”

      It can if the listing agent sees you as a pawn, and knows you’re overly emotionally invested.

      You could have the highest offer and they could tell you the house is all yours, if you come up $50k.

      I think the letter can backfire more often than it can help.

      1. M

        at 9:48 am

        Interesting perspective, but nothing stops the listing agent from telling that to every buyer, whether or not it’s true. Doesn’t matter if they wrote a letter or not. I see writing a letter more as attempting to manipulate the seller, or get an edge over other buyers, rather than tipping my own hand (assuming the letter didn’t say something like “this is the perfect house for us and nothing will ever compare, please choo- choo-choose me!”.

        1. T

          at 2:12 am

          Totally agree with RPG here, thinking otherwise is delusional. No one cares about your story unless it benefits them. This is a business transaction. If I were your partner I would be completely embarrassed – and going against the advice of a professional shows your lack of judgement. But hey – you ended up with the house so you win the debt race!

  4. Paully

    at 9:30 am

    Keep an eye on the address from that Star article. I expect that you will see it back on the market in a few months, being sold for a tidy, quick profit.

    Remember the story about the house on Dudley in Willowdale a few years ago that hit the papers after selling for $400,000 over list? (seems so cute now: “They only paid $400k over? Wow! What a STEAL!”) Anyway, the story was that the house was bought by/for a student to live in while going to university here. I am not sure how she enjoyed living in the muddy open hole, since it did not take long for the heavy machinery to arrive. The house has been replaced by a nice, new Willowdale McMansion and resold. So much for the story counting for anything.

  5. kramer

    at 10:04 am

    It would be very much like winning the lottery – because it is actually COSTING the other 99.999% of people who never “win”. My sibling tried this letter nonsense dozens of times with offers below asking – all it did was delay their purchase costing her many % points in appreciation, and her affordable dream house got less and less dreamy every month. I just see this as bad capital management. Livin’ on a prayer of a lottery win… Better to know your budget and find the best it can buy… not the best it + a 1/1000000 chance can buy.

    I am almost certain that in 20 years no one will be selling their homes (speaking in generalities of course)… Especially detached homes and large family semis… Way way way more than ever in this market they will be assets passed on and kept as family homes and never listed… If retirees must depend on some of that home equity to retire, they can take some home equity out and have their working children paying it off as a mortgage in return for being able to live there and being certain it is left to them as a family asset. Save potentially hundreds of thousands in fees and taxes between selling family homes and children buying new homes. Higher degree of family financial planning and asset management, requiring transparency and trust between family members.

    But what about the kids who want their own path/house/freedom… that’s easy, options include:
    1) move to another city
    2) work/save your way to buying a really ‘low-end’ house when you’re 35
    3) work/save your way to buying a higher end house when you’re 45

    I will be going with the higher degree of family financial planning.

    This is the future of Toronto. I have seen it in my dreams.

    Why has it not been so obviously prominent in the last 20 years? Because children have been able to save down payments and actually purchase for themselves relatively easily, making it unnecessary for the parents to hold on to the home as a family asset. Gen X/Y are the last that will be able to afford their own detached houses in Toronto without excessive help from “bank of mom/dad” (excluding rock stars earners who will still be able to buy whatever they want – and there are many in this city relative to the amount of detached houses).

    As every decade passes it will make less and less sense for a family to sell one large property and buy two-three smaller ones. It will also become less and less possible.

    I honestly don’t think this is too ‘optimistic’ a view of the market… nor do the foreign investors apparently.

    Good luck all. I hope you own now, and hope you like what you own.

    1. Ralph Cramdown

      at 11:57 am

      That’s a very interesting view. What you describe sounds an awful lot like the plot elements of a Jane Austen novel, something by one of the Brontë sisters, or most any BBC period piece. The landed gentry borrow against the estate, and have trouble paying the mortgage, or the taxes. The children all live under the same roof, waiting for their chance — the house if firstborn, a suitable match to someone else in line for his parents’ house if not. Sometimes a wealthy son-in-law or a rich American wife can be brought in to save the family fortunes. But all the while, dissipation, dissipation, as the world slowly modernises around them and the older generation tries to keep from losing or selling the estate, piecemeal or en bloc (then, to the bankers or wealthy foreigners, now to townhouse developers).

      Only instead of taking place in a noble country seat on a hill surrounded by 3,000 acres of good farming, a deer park and a stream with trout, it all takes place in a semi in Riverdale. It didn’t end well back then — most of them ended up selling out to people like Madonna.

      Still… Intriguing. The Danforth Saga? Roncesvalles Abbey? Upstairs, Downstairs, and Downstairs Some More on Sherbourne Street? Living Low in High Park? Swansea Swan Song?

      1. Marina

        at 12:31 pm

        Just saying, I would watch ANY of those! Especially if the priest of Roncesvales Abbey secretly took up with the down-downstairs scullery maid from Upstairs, Downstairs, and Downstairs Some More. and the scullery maid was a secret heiress in the Danforth Saga!

      2. kramer

        at 12:40 pm

        Hahaha. Downton Annex.

        Jolly good.

      3. kramer

        at 12:51 pm

        One thing I didn’t stipulate was that the parents will take some equity out to buy a condo in Collingwood or something. They don’t need to be in reasonable commuting distance to the jobs anymore.

        Rather than pay the $120,000 in fees/taxes (to sell and downsize) and have “the family” “leave the market forever”, they keep the house in the family and “give” their kid(s) accommodations close to where they can earn money to pay off a mortgage that is only the size of the collingwood condo that the parents now live in.

        I would rather retire in collingwood and have my kids be able to live close to their jobs than retire in too big a house too close to jobs while my kids spend 3 hours on the road every day driving to and from Hamilton. It makes better “total family” sense.

        This of course all assumes that the family “has their s*** together”… both parents and children. No freeloading!

        A bit far fetched… but I can think of dumber market outlooks.

        1. kramer

          at 1:01 pm

          FURTHERMORE… if “laneway houses” and “friends buying houses together” are in the news as “options” today… then I don’t see why it is so insane to think that two sisters and their young families could share a roof for a while. Like I said… detached and large family semis. I don’t assume 8 people in a 3 Bed 1 Bath semi.

          But you’re right… for many avoiding good old fashioned family drama could be worth the hundreds of thousands and commuting until your head blows off… that will still be the norm for a while.

        2. Ralph Cramdown

          at 2:17 pm

          I understand exactly what you’re saying, and I think some families will be able to make it work. It will probably be most common in families of newer immigrants from places where multigenerational living with extended family are common.

          But the first generation of children who grow up here are not going to want to live with their parents into their 30s. Our society is built on the concept of becoming independent (i.e. having your own place to live separate from parents), and to a great extent, our economy is built to rely on it.

          You also point out the other thing — families that don’t have their act together. “Shirtsleeves (i.e. working class) to shirtsleeves in three generations,” is the classic english phrase. Nasty divorces. Children who are so great at partying that they think they’d make EXCELLENT nightclub owners. Going into a recession with too much debt. These are time honoured ways of going bust with what started as a winning hand.

          I agree that, eventually, Toronto freehold property will be unaffordable for all but the top 10%. But I don’t think this cycle is the end of it. Right now I see classic end-of-cycle stupid, like David’s clients looking for a cash flow negative condominium investment, or Pasalis’s tales of people like that who want to finance the monthly deficit on their credit cards. As to the foreign buyer element, there’s three types: Long term, multi-generational players, those who think they are but who will sell if prices start to drop, and momentum players who KNOW they’ll sell if the market turns. We don’t really know how many of each we have.

          1. kramer

            at 3:22 pm

            All fair points. I suppose they prevent something like this from ever being a ‘norm”.

            Maybe it will just happen a bit more for the most choice properties… combined with the bar for what is considered a really choice property slowly lowering.

            I guess I think about the most choice Annex properties today (like near Bedford/Prince Arthur, or other grand U of T/Annex houses) and think to myself who would ever EVER sell those… the property itself is essentially a business… (either currently is a business, or is available to convert to one at any second) and then I wonder if that will stretch out. If I owned one of those, I would always think that selling it would be like cashing out for my own immediate selfish reasons at the expense of family wealth going forward. And would that apply to a greater part of Toronto Real Estate in 20 years. I guess maybe slowly, and only for families where it works (odds against). But I guess also if the market is tapped out then cashing out and investing in something else is a way to keep the family wealth moving forward, eluding to your comments on if the market turns, let the cash out begin.

    2. AT555

      at 12:30 pm

      I agree that assets will be held longer and passed along the family tree. This is very common in many European and Asian countries where buying a piece of land in a major metro is out of reach for middle class.

      1. Kyle

        at 4:12 pm

        I agree, there will come a day that if you or your family already own a house in Toronto you’re considered “old money”…

        Based on the March TREB stats that day could end up being sometime this year.

  6. kramer

    at 11:11 am

    PS: So, they DOWNSIZED, and got $150,000 off highest bid.

    Ipso facto, the sellers are financing these future missionary trips / volunteering efforts.

    I suppose many donate large sums to charity and such. From that angle this doesn’t seem absurd… but having it show up as part of a home sale… Well, odds of winning Lotto 6/49 are 1 in 14,000,000, I’d say this is on par.

  7. Boris

    at 11:45 am

    Yep, CNN is fake news.


  8. Boris

    at 3:22 pm

    Wow that letter is fully ridiculous.

    A bunch of bible thumping airheads, brainwashed by the orthodoxy into believing the Easter Bunny is real. Theology is ignorance with wings.

    Hey, I have a bridge to sell you Moses….

    1. Geoff

      at 9:03 am

      You know it’s okay to not believe (I don’t) but you don’t have to mock or be so disrespectful.

      1. Chris

        at 9:48 am

        Don’t bother with Boris, I’m pretty sure he just posts Trump-esque memes hoping to elicit a response. Like they say, don’t feed the trolls.

        1. Boris

          at 11:14 pm

          Chris, you naiive little man (or woman). You call me a troll yet fail to address any actual content in your claim. Even stupid Boris did so by suggesting that their entire basis of reasoning was based on a brainwashed fairy tale. Make a point. Be smarter. I dare you. You won’t though.

          1. Chris

            at 9:25 am

            You spelled “naive” wrong.


          2. T

            at 2:03 am

            Oh Boris, you obviously have a lot of time on your hands.

  9. Nic

    at 11:14 am

    following on the thread of future affordability in TO.

    I’ve seen other cities – London/NY/Paris – where larger estate homes (a la Annex) are subdivided into 2-3 single level family homes and sold as 2-3 bedroom smaller “condos”. Wondering if this is ever going to be an option in this city; where owner’s can keep equity on a “portion” of their existing home yet sell another “portion”. This may open up more affordable options.

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