Multiple Offers on Leases
Oh no … oh yes! Doesn’t it sound like the most absurd thing? Multiple offers on leases don’t happen very often throughout the year but I suppose September is a special month and the 1st is a special day. Usually, it only takes one offer to seal the deal, but when properties are getting 2-5 offers (for a lease!) it’s pushing my average to three offers.
It’s interesting to see the difference between, let’s say, leasing for April and leasing for September. In April, tenants are casually looking at units and “ok this one”. We wait a while and they get the place. Simple. For September, it’s like “Holy crap, I just lost out on property A, property B just got leased before I had the chance to see it and property C the landlord has decided to rent it to their dog! Forget it, throw my preferences away. Give me what you can, I don’t have much time. I don’t care if it’s a tad rundown, has no balcony or faces east. Send the listing to me and let’s sign asap!” Ok perhaps the difference is not that drastic but I think you get the picture. It’s very frustrating – not just for me but especially for my clients. As their agent, you want to give them the best, not leftovers.
In this sitution it’s tough, but here’s some advice:
- Ask yourself whether it is worth negotiating down the price by $25-50. If the unit is reasonably priced and you try to reduce the price, you run the risk that the landlord simply brushes your offer aside as others may be lining up to give the landlord what s/he wants. $300-600 a year may seem like a lot, but trust me when your offer doesn’t get accepted 2-3 times you’ll likely regret not coughing it up.
- Agree to a longer term e.g. 18-24 months. You’ll have a good chance at reducing the price and securing the lease. None of the “Let’s keep it at one year, I’ll move in and if I like it I’ll extend the term” talk. Landlords treat it as BS. Needs to be in writing.
- If you are an existing tenant and your landlord hasn’t found a new tenant yet, ask to stay for an additional month. In October, you’ll find the units coming to you and not vice-versa.
- Offer an earlier closing date e.g. 2 weeks. On a $2000 lease, it’s approximately $1000 that you’re “offering” the landlord. Most tenants think this way. I’m not saying it’s wrong to think this way. It could hurt the wallet especially when no one will be moving in within those weeks. But be aware that this is usually more attractive than an increase in price. Over the long-run it could be beneficial as well. Let’s say in 2009 you’re in the market for another unit, you’ll be looking for a lease for August 15 instead of the dreaded September 1st. You’ll be in a much better position to get what you want without paying a higher price.
- Oh yeah … don’t forget to have your paperwork prepared and be ready to act … be decisive!
I’m sure once I’ve secured places for all my tenants and look back at the struggles, it will feel like enormous accomplishment! I don’t know why, but I know it will.
