How Multiple-Offer Situations Work for Buyers in British Columbia

Few things feel as pressured as learning that other buyers are bidding on the same home. You may have a short window to decide, little information about the competition, and a lot riding on the answer.

This article explains how multiple offers are generally handled in British Columbia, what guidance applies to real estate licensees, and the questions you can ask to protect yourself.

This article covers the law of British Columbia.

What a multiple-offer situation is

A multiple-offer situation arises when a seller has received more than one offer, or expects to, and decides how to respond. BCFSA's guidance recommends that only one offer be countered at a time. Offers can differ in price, deposit, subjects and completion date, so the highest price is not always the one the seller picks.

How an accepted offer with subjects works as a contract depends on its exact terms, so it is worth confirming with a lawyer. A contract respecting land generally needs a signed writing to be enforceable, so keep every signed offer, counter-offer and acceptance. The law also recognizes two alternatives to a signed writing: acts by the party to be charged indicating a contract was made, and reasonable reliance that would make non-enforcement inequitable. This rule does not apply to a lease of land for a term of 3 years or less, or to a contract to grant such a lease.

What guidance applies to licensees

Real estate licensees in British Columbia are regulated, and BCFSA publishes guidance on offers. That guidance sets minimum requirements for licensees and recommends that only one offer be countered at a time.

The Real Estate Services Act also allows BCFSA to make rules on licensees' trust accounts, on disclosures in relation to real estate services, and on standard forms that licensees must use. It may also require disclosures to parties to a trade who are not represented by a licensee.

Some local real estate boards have their own rules about how competing offers are presented or disclosed, and those rules may apply only in certain areas. Whether you are entitled to know the number of competing offers can depend on where the home is and on current rules, so ask your agent what applies to this particular sale.

Deposits in a competitive situation

A buyer usually makes a deposit with the offer or after the offer is accepted, and it is usually held in the brokerage trust account, with the brokerage holding it as stakeholder. Licensees must pay money received into a trust account, and withdrawals are controlled by the Act.

Some offers provide for no deposit until after subjects are removed. Guidance notes the risk to a seller of not receiving a deposit at acceptance, and the seller can counter-offer to increase the deposit or require it before subject removal. If you are competing, expect that a larger or earlier deposit may be one way a seller compares offers.

For a new development presale, developers must hold buyers' deposits in trust under the Real Estate Development Marketing Act, and BCFSA can investigate if that did not happen.

What you can ask and decide

• Ask your agent how the seller intends to handle offers, including the date and time offers will be reviewed.
• Ask what you are permitted to know about the competition in this area.
• Ask whether a shorter subject period or fewer subjects is realistic for you, and what risk that adds.
• Decide your ceiling in advance, and the point at which you will walk away.
• Ask what deposit you can comfortably afford, and when it would be due.
• Ask for any change to your offer to be put in writing and signed.

Removing subjects such as inspection or financing to compete is a personal risk decision. If you remove them and then cannot complete, what happens to your deposit depends on your contract and your situation, so it is worth confirming with a lawyer. Under the Law and Equity Act, a court may relieve against penalties and forfeitures, on terms it thinks fit. Talk to your lender and a lawyer or notary before dropping a protection.

What to do next

• Get a mortgage pre-approval before you start bidding.
• Arrange an inspection you can complete quickly, or a pre-offer inspection if the seller allows it.
• If buying a strata lot, request strata documents early, since the strata corporation has one week to provide an Information Certificate after a request.
• Have a lawyer or notary review your offer terms and any unusual clauses.
• Keep copies of all offers, counter-offers and removal notices.
• Raise concerns about how your offer was handled with your agent first, and consider contacting BCFSA if you think rules were not followed.

Frequently asked questions