Back in 2023, we wrote a well-received article called the 2% Rule.  This hard-hitting exposé on the embarrassing attempt by the milk industry to fat shame full-figured milk garnered us national attention…no, wait, it was about multiple offers in real estate.

It’s 2026 and multiple offers do still take place on attractive properties that tick all the boxes for buyers.  We’ve represented buyers and sellers in a number of multiple offer situations and we thought we’d pull back the curtains on how it actually works – and how to make it work for you.

Here we go.

Not All Offers are (even close to being remotely) Equal

The first and most surprising aspect to multiple offer situations is that when there are multiple offers, the range between those offers is often very big.

In fact, it’s not uncommon for some of the offers being submitted to be less than the list price.  Yes, that doesn’t make a lot of sense.  Yes, the agent submitting the offer is aware that the list price is below market value and other buyers are also submitting offers.

Despite the fact that the winning bid in a multiple offer situation – where a property is listed below market value – needs to be over the list price, every time there are a number of offers, you can bet there will be one or two offers from agents who should know better.  These offers don’t come from experienced agents generally, but rather from newer agents who have clients who push them to submit an offer with a price that is very unlikely to work, because “you never know”.  While we can applaud that level of positive thinking, it is not an approach that will help the buyer actually win in a multiple offer situation.

With a number of offers on a property, a surprising number of other offers are just a bit above the list price.  We chalk these up to a different type of hopeful buyer, who know that the list price is not what the home is worth, but who don’t have the budget to go much beyond it.

Invariably, there are a few offers at the high end that end up being the real competitors for the home.  With a dozen offers on the table, it isn’t uncommon for just three or four of them to actually be the offers being considered based on their price.  While there is sometimes an outlier that is head and shoulders above the other group of offers, it is surprisingly rare.  In our experience, dealing with hundreds of multiple offer situations for our clients, the winning bid is often not that much more than the second or third place bids.  It’s typically enough that the seller feels there is no point continuing the process, but not normally a significant difference from bids that were also in contention.

Money Talks…but So Do Other Things

While price is obviously a powerful aspect of the appeal of any offer, it is not the only consideration for sellers.  The other biggest aspect that can influence a seller’s decision isn’t the closing date, the deposit amount or the lovely letter written by a prospective buyer, it’s about certainty.

A clean offer is an offer with no conditions, where if the seller accepts it, the deal is firm and a contract is binding with no change of heart possible by the buyer.  Ideally such offers come with proof of a bank draft already done so that the offer can be accepted and the bank draft provided immediately.

While conditions on financing, home inspection or other aspects are always permitted to be included in an offer, when it comes to multiple offer situations, such offers often end up being rejected in favour of the clean, no conditions offer.

This is true even when the offer price for the conditional offer is higher than the clean offer (or offers) being provided.  Buyers with conditions on their offers often have trouble understanding that for the seller, a bird in hand is better than…er..a better bird in the bush.  Simply put, during a multiple offer situation, you have a number of buyers ready to compete to buy the property.  If you accept any offer that is conditional, there is a very real risk that the deal will not firm up.  If you go back to agents who submitted an offer a day or two before to let them know that the property is once again available because the deal that was accepted fell through, you have no guarantee that all – or any – will submit offers again.  Buyers can become upset, disillusioned or find another home in the time it took for that deal to fall apart, and we’ve seen hot properties with multiple offers go back on the market for weeks before finding a new buyer.

It is true that closing date, deposit amount and the situation of the buyers can influence the decision of a seller, but the two big aspects in any multiple offer situation are price and conditions.  In almost all situations, the best price with the least number of conditions is chosen by the seller.

It’s Not Exactly Lying

Before a home is sold in multiple offer circumstances, there is often a round or two of further negotiations.  This is due to the nature of most listings in Ontario, where bids are submitted blind, with each buyer not knowing what the other bids in play contain.  While changes to legislation allow open bidding, it is still very rare to see, and as a result, almost all multiple offer situations involve a number of buyers who don’t know what the other buyers are offering.

Most listing agents encourage buyers to come to the table with the best and last offer and sellers are under no obligation to allow any buyers to improve their initial offer.  Despite this, it is not uncommon for a listing agent to notify all offers that the seller is not ready to make a decision yet as a number of the offers are quite close, and to offer the buyers a chance to make changes to their offer, such as an improved price or removing of conditions.  The rules for this sort of disclosure are quite clear, and agents cannot lie about the strength of an offer to any individual agent.  They can simply say that the seller is having difficulty deciding due to offers being quite close and to offer all buyers a chance to make any changes they want to their offers.

The information shared by a listing agent that offers are close in appeal to the seller must be provided to all buyers, not simply the ones who are materially similar to other offers.  This means that the lowest priced offer with conditions is offered the same chance to improve their offer as is the highest priced clean offer.  A good buying agent understands the market and where their position in the offer pool is likely located, but it is not uncommon to see a leading bid raise their offer and outbid their previous offer.  It is also not uncommon to see a lower priced offer suddenly rise to the top, as buyers who were trying to not overpay with their initial bid decide to go to their maximum to make sure they don’t miss out.  It can be a deeply frustrating experience for buyers, and it is the reason why the legislation was changed to allow different types of bidding.

Despite this, the vast majority of multiple offer situations still follow blind bidding rules and changes to offers are not uncommon during the bidding period.  Whether it is two, three or even four rounds of the listing agent going back to buyers, it is quite common for the final accepted offer to look very different than the initial leading offer.

Leave Some Gas in the Tank

The reality of the above situation means that we almost always advise our clients to keep a little bit of money in reserve during a multiple offer situation.  If we can help our clients not overpay, we love to do so.  At the same time, if an agent is going back to buyers with opportunities to improve their bids, it is useful to have a small amount of gas left in the tank.

While it is challenging to determine the exact number, we work with our clients to find a number that is two things at once.  First, it is a reasonable offer that will at least be close enough to any superior bids, that the seller feels it is worth asking buyers to improve if they want to do so.  If it is too low an offer, a seller may simply pick the highest price offer as being materially superior and accept it.

Secondly, the offer price needs to be such that it isn’t substantially under what the buyer would pay for the property.  That may sound like the same as the above, but it is actually quite different.  While an offer needs to be strong enough to either win or be in contention – so as to trigger another round of bidding – it also has to be close to the ceiling for what the buyer would pay.

The reason for this is simple.  If another round of bidding takes place, it can be useful from a negotiating standpoint to be able to provide an increase in price, even if it is a relatively small, token amount.  It tells the seller that the buyer is interested, values the home, but they have reached their ceiling.  A small increase if some of the offers are similar in appeal can make the difference, so having that in reserve can be the difference between being the winning bid or not.  At the same time, holding back too big a reserve can be counterproductive as the seller decides to go with another offer, not knowing the buyer could make a substantial increase.

While losing in a multiple offer situation is never pleasant, a measured approach like above means that our clients are rarely in a situation where the winning bid was just a little bit above their maximum comfortable price.  We either win at a price that we’re comfortable paying, or someone else significantly outbids our client and pays a price they wouldn’t want to pay.

There is no doubt that multiple offers are complex, stressful and difficult to navigate.  At the same time, they follow rules and processes that can be managed to optimize the result.  If you’re worried about being in such a situation with your purchase – or you want to have listing agents who know how to best handle your sale – then get in touch with us to talk more.