Talking real estate deals with award winning Vancouver, BC Realtor Paul Toffoli

Mark:  Hi, it’s Mark Bossert from Top Local Lead Generation.  We’re here with Mr. Paul Toffoli; he’s an award winning Realtor in Vancouver, BC. We’re talking about the art of multiple offers.  How’re you doing today Paul?

Paul:  I’m very well Mark thank you, yourself?

Mark:  I’m good.  So, how do you deal with multiple offers?

Paul:  So, we’re looking at it today from the buyer’s perspective.  Obviously the buyer and the seller have very different perspectives on multiple offers.  The buyers are not very excited about them and the sellers are extremely excited about them, so we’re going to look at it from the buyer’s perspective.  How do you put yourself in the best position to be successful if you’re in a multiple offer or a competing offers situation?  The Real Estate industry has changed a lot in the last 20 years; it used to be that sellers has to deal with offers one at a time, they couldn’t deal with them at the same time.  The Real Estate Act has actually changed to allow the sellers to deal with them at the same time and basically lay them down on a table, side by side, then make a decision as to which one is the best one for their own interests.  So as a seller you have to be much more aggressive with your offer if you’re going to be the successful one.

Mark:  I think you meant as a buyer.

Paul:  Did I say seller?  O.k. Yes as a buyer you have to be much more aggressive if you’re going to be successful and that’s not just necessarily just about price because as we have talked about previously there’s a number of factors that are going to be deciding factors for most sellers.  Those may be subjects, so the subject to the sale, is it subject to inspection, is it subject to financing, all these different things; so as a buyer, if you can eliminate the need for those then that will put you in a better position.  People always say, wait a minute I need to have my subjects, it’s very important, absolutely it’s very important that you cross the t’s and dot the i’s.  So some of the things that I work with my clients on is can we do an inspection before we put the offer in, therefore we know about the house, we don’t have to have that as a subject, can you work with your mortgage broker or your bank to get all the t’s crossed and the i’s dotted so that they will, or you will be comfortable going in without a financing subject.  Things like title search and property disclosure statement, those are very easy to deal with ahead of time.  

If you own a home, this is tricky if you have to sell before you buy, that becomes very tricky and that’s a very individual decision that we have to go through, the pros and cons of how to deal with that, and that really depends upon the market.  So, whether it’s a very active seller’s market or if it’s a buyer’s market or a balanced market, there’s different strategies.  So that talks about the subjects, I think.  

Other factors; are you flexible on your dates, so I always talk to the sellers Realtor, let’s find out what the ideal dates are for the seller.  Sometimes they have already bought a property; they have specific dates that they require in order to make it work.  Other times they won’t have bought yet so they want longer dates, three, even four months so that they can take the time and do the home search.  Sometimes, they’re not buying something, they’re just wanting cash as soon as possible and they may also maybe thirty days and they may want to rent back for a period of time depending upon, so depending upon my buyers position if they’re able to buy the property and rent it back to the seller or let the seller live there for thirty, sixty days, sometimes that can be a deciding factor.  

So each specific situation requires proper analysis and then we go together with our clients and we put the best possible offer in that we can put.  Sometimes it’s not possible to remove those subjects ahead of time, so we just have to say this is the best we can do, we’re putting our best foot forward and then always at the end of the day, money talks, and sellers always look at that dollar figure and different sellers handle things differently.  So what I recommend to my clients is, let’s put the best, you know we look at all the comparables, we look at what the value of the property is in the market and I tell my clients, let’s put a number down on the purchase price that is the highest price that you’re comfortable paying so that if you don’t get it you don’t say geez I would have put a few thousand dollars down if I’d known that I would get it or on the converse side if you do get it at that price you’re not saying holy crap, I really paid more than I wanted to.  So, it’s that balancing act, and it’s really, it’s really a gut thing for my clients, what’s their comfort level, what do they think is a fair price and whether they’re going to feel they had more to give and sometimes we only get one chance at it. 

It really depends upon the sellers. The sellers will sometimes come and say, and you don’t necessarily know this before you put your offer in, but we try to find the information out, sometimes they’ll say, one time best price takes it if everything else is equal, other times they’ll look at the offers and they’ll come back to the strongest one or two and say you know you’re really close and often if they’re really close we’ll do this, they’ll come back and say, you know what, is this the best you can do and if everybody says, yes this is the best we can do, they’ll make a decision; sometimes people will bump their offer up a little bit.  So you really have to be very careful when you’re crafting your offers on a multiple offer situation.

Mark:  Getting all the data I’m sure, and knowing who the seller is and what drives their decision to sell, all their circumstances, just like you said, that seems to be the biggest, at least in my experience that’s the biggest thing to get the best deal possible.

Paul:  Yes, asking all the right questions and it helps too sometimes if you know the agent that they’re working with and knowing how they handle things.  So having the experience and you know, I can’t even count how many multiple offers I’ve done now over the years.  I’ve probably have done, wow, it’s got to be in the hundreds and it’s always different every time and it’s always interesting.

Mark:  So, how much has it changed based on the market?

Paul:  It absolutely changes based on the market.  You tend not to get multiple offers in a buyer’s market unless something is really, really well priced  and by well-priced, I mean on the low side where you know, below market value where you’ve got a bunch of different people saying this is a great deal.  In a balanced market you’ll get it occasionally if that’s the case, it’s in the seller’s market where you really get those multiple offers because there’s a lack of supply, there’s a fair bit of demand and buyers are motivated to get that one property so that’s where you usually see something, in the seller’s market.

Mark:  So, there you go folks, if you want somebody to help you deal with the kind of crazy market that we can often have in Vancouver, BC this is the guy to talk to, hardened veteran and an award winning Best Realtor in Vancouver; voted by the readers of the Georgia Strait, Mr. Paul Toffoli.   You can reach him at toffoli.ca or give him a call 604-787-6963.  Thanks Paul.

Paul:  Thanks Mark.

Mark: Hi this is Mark Bossert from Top Local Lead Generation. We're here with Paul Toffoli, an award-winning realtor in Vancouver. How are you doing today, Paul?

Paul: I'm great, thank you very much. Yourself?

Mark: I'm good. So we're getting into the nitty-gritty. We're making deals — making and negotiating an offer. How does a realtor help me with that?

Paul: Sure, I think this is where we're — like you said — 'getting into the nitty-gritty'. We've looked at properties — we've sorted the gems out from the chaff, to mix some metaphors. Finally we've narrowed it down to one and my client is like, 'You know what? This is a property that I would like to own.'

Now it comes down to the contract work. This is a legal, binding contract — it's a big deal. It's not something you can do lightly.

What I do with my clients is the following: I always like to be prepared. I make sure that, as we're going through the process, I give them a blank copy of the contract along with some suggest subjects and terms. This is just to make sure they're familiar with it before we get to that stage of drafting an offer — it may have to be done in the heat of the moment, it may be hurried. It's always better for a buyer if they're comfortable with that contract, and have seen it ahead of time.

The contract form that we use is created by the Real Estate Board and by the Law Society of BC. This contract has been in use, in different forms, for 30+ years. It's always updated annually, as to new quirks and definitions and so forth. It's something that we can be comfortable with — 90%+ of all residential purchases are done using this contract.

What it stipulates is very straight-forward: Buyers' name, sellers' name; Property address, property legal description; Identification number or PID; and then the terms.

Some of the terms that we know are negotiable: Purchase price; amount of the deposit (which, in our marketplace, is typically about 5% of the purchase price), typically payable upon subject removal (though it is negotiable: sometimes it's payable upfront, fully refundable, or a portion of it is payable upfront). The standard practice for deposits right now is about 5% of the purchase price upon removal of all conditions.

Then, completion dates, which is when you pay your money and the title transfers.

Next, possession date, which is usually the day after, or a few days after (depending on the seller and whether they're buying another property and so forth), the completion date.

Then the adjustment date, which is when you adjust property taxes, if there's strata fees, utilities, when do they get adjusted.

Then, what's included. In our marketplace and in the standard contract, anything attached to the walls is included in the purchase of the property. Well, that includes blinds, but does it include drapes? What about appliances? All those things, we just have to make sure that we cross the t's and dot the i's. Another one that's sometimes forgotten — maybe that shed or play palace in the back yard. These are things that you don't want to forget. Those are considered included items.

We also talk about subjects, or conditions prior to purchase. It's typically going to be 'subject to financing', 'subject to inspection', 'subject to the strata documents' if it's a strata, 'subject to title search', and 'subject to property disclosure statement'. All of these things are going to be put in. Then we negotiate not only one of those subjects, but how long does the buyer have to pull through. Is it a week? Is it two weeks? The more complicated the subject, the longer time period to complete it.

Those are all things that we have to put into the offer, and those are all negotiable items. The seller will want those dates shorter, and the buyer will want those dates longer.

So we have to go through all of those items when we're drafting an offer. As I said earlier, it goes much smoother if my clients have a copy of all that information in the contract in front of them prior to us making an offer. They've already seen everything so all that we have to deal with is what have to put in and what items are negotiable. It just simplifies the process and makes the experience less stressful.

Mark: So it sounds like it's a fairly convoluted, complex situation with a lot of information that you need to be aware of. That's where an experienced hand can really help guide you and make sure that you don't miss anything. Is that right?

Paul: It's absolutely true. You want to make sure that you're dealing with somebody who's been through this before, because it's easy to make a little mistake that can end up costing thousands of dollars — or end up losing the property depending on what the situation is.

Mark: Right. So we've been talking with Mr. Paul Toffoli, he's an award-winning realtor in Vancouver. You can reach him at his website toffoli.ca or give him a call at (604) 787-6963. He'll look after you. Thanks, Paul.

Paul: Thank you, Mark.