If you think the Toronto real estate market smells bad these days, with rising interest rates and the desperate need for more affordable housing, it’s about to get a whole lot stinkier. Stink bids in the Toronto real estate market are back.
What is a stink bid real estate?
A stink bid is essentially a really low ball offer from a buyer well below list price. It’s an aggressive offer tactic used to test a sellers potential desperation in the market, particularly for listings that used to sell in mere days from massive bidding wars, but now sit idle on the MLS for weeks or even months.
But do stink bids work?
And for who? The buyer? Or the seller?
A stink bid has a low percentage of success, unless the seller is really desperate to sell, but it could still lead to a reasonable discount under list price and market comparables for Toronto home buyers.
Stink bids are better than no bid at all, so some Toronto home sellers might feel relieved to get any offer just to start negotiating a better price in a battle of wills between buyer and seller. And more savvy sellers will use the stink bid to potentially drum up other competing offers with the hope that more competition will drive up prices back to list price or higher.
Either way, the days of bidding wars in Toronto seem to be dropping like flies, while stink bids are definitely on the rise.