Multiple offer situations are not common unless:
• The home is underpriced.
• The home is properly priced and the property happens to be very desirable to more than one buyer at a time.
• The market is flooded with buyers (like it was during the Edmonton real estate boom of 2006/2007) and/or supply just doesn’t meet demand.
Any of these situations may create a multiple offer situation, and since people are competing with one another, one or more of them may offer over the list price of the home to win. However, it should be noted that not all multiple offer situations lead to bids over list price and not all bids over list price are accepted. Furthermore, not all over-list contracts are completed. With all these caveats, you can see how uncommon the situation would be. A lot has to come together to get someone to pay more than sticker price on anything, especially something as expensive as real estate.
An exception to the multiple offer ‘rule’ is when a buyer is very interested in a property and just offers over list price to make sure they get the home. When a home is priced properly, some buyers will not mind paying a little over list price to get what they want – even if no one else is competing for the home at the time. Perhaps the buyer anticipates a lot of interest in the home or they have recently lost a home to other competitors in a multiple offer situation and don’t feel like getting burned again. This is also a very rare occurrence, though.
When we purchase our first condo, we paid much more than list price in a bid against other buyers. In fact, we paid 13% more than the sellers were asking because 6 other people wanted the condo as well. We counted ourselves lucky because this was May of 2006 and at the time, prices were climbing faster than anyone had ever seen in Edmonton.