If you’re buying a house in Guelph real estate, you’re likely in a much better position than you would have been in spring 2022. The dreaded “holding offers” has almost disappeared- in a buyers market like we find ourselves dealing with in Spring 2025, holding offers is almost always a failed strategy.
Instead, the market has moved more towards an irrevocable period. But what is that?
This blog is going to take us through both holding offers and an irrevocable period. If you’re considering selling, it’s crucial that you know the difference between the two so that you can make an informed decision.
Pros of holding offers
Cons of holding offers
What is an irrevocable period in real estate?
Pros of an irrevocable period
Cons of an irrevocable period
What is “holding offers” in real estate?
Holding offers is a real estate strategy similar to an auction, where sellers list their home lower than market value to generate interest. By “holding offers” and reviewing them all on a certain day, the seller is hoping to engage many buyers to drive the price up.
Does holding offers work in all markets?
No. Holding offers really only works effectively in a sellers market. This is because there is low supply and high demand. Buyers don’t have many other options and are forced to compete on available houses by trying to get the most attractive offer to the seller. This is typically achieved by having the highest price and the least amount of conditions.
How does holding offers work?
Think of an auction. The auctioneer starts all bidding at a low price and allows the participants to bid it up to whatever the highest person is willing to pay. If there was a 1911 Honus Wagner rookie card up for auction, it may sell at a record price because there are so very few in existence. The buyers become less price sensitive because they may never see another!
This is the analogy we use for holding offers. List your home below market value (often times well below), review offers in 4-7 days and hope that the market sees value. This was the magic sauce in Spring 2022. Unfortunately for sellers, we’re not in 2022 anymore. 2025 is very different.
A note of caution for buyers in this scenario: make sure your agent knows market value. The last thing you want is to get caught up with emotion. Overpaying could cause issue with a home appraisal from your lender.
The one side bar in this strategy is the chance you could receive a bully offer (also known as a pre-emptive offer). You can read more about what a bully offer in real estate is, and the pros and cons here.
The risk of holding offers in this market:
Sellers with this strategy need to show value to buyers so that you create a frenzied mentality. As mentioned, buyers have access to many tools these days like HouseSigma, where they can look at past prices.
Listing your home at market value and holding offers is not likely to give you the sale price you’d want. This is because buyers don’t see value in competing for a home that’s already at market value.
As an example: in a strong sellers market, a home is worth $500,000. The seller decides to list at the $450,000 price point and review offers after 7 days. The seller is hoping that the market will see value at $450,000, potentially bidding it up to over $500,000. However, listing at $500,000 and holding offers will likely fail. It won’t provide buyers with the value they’re looking for and they may be reluctant to submit an offer. After all, they compete and don’t want to pay “too much”.
The other major risk as a seller is that you hold offers and on the offer date, don’t have an offer that is suitable to you. In the above example, a home with a market value of $500K is listed at $450K. Let’s say that 5 offers come in, with the best being $480K with a home inspection condition. Now what? Do the sellers accept the $480K? Or do they cancel and re-list at what they actually want of $500K (we see this a lot).
Pros of holding offers
The obvious pro is that you get a bidding war and it drives the price up. Secondarily, a great pro of holding offers is that if there are two buyers who are both very interested, they end up competing with each other to be the most attractive offer. This could mean increasing their price removing conditions, changing closing dates and more.
However, even when competing, in this market we’re finding buyers are reluctant to drive up a price or removing conditions such as financing and/or home inspections.
What is an “irrevocable period” in real estate?
An irrevocable is a defined period of time that a buyers offer is valid until. Irrevocable means non-retractable, the period of time that the buyer has committed to honour their offer to the seller, or the seller has committed to the buyer.
Example of irrevocable
A buyer submits an offer on a property at 9am Monday, irrevocable until 9am on Tuesday. This means that the buyer is committed to honouring their offer until 9am Tuesday. If the seller accepts the offer as is (without changes) at 8:50am on Tuesday, the contract is in place and the buyer is obligated to proceed.
A Sellers Direction form with a required irrevocable
Let’s say a seller lists a home. It’s common in Guelph real estate to see that this listing will also have a “Sellers Direction” form in place. This form has a request/ specific instructions from the seller. A common element on that form is a request for a specific irrevocable (likely 24 or 48). This means that the seller has asked the buyer to ensure their offer is valid for 48hrs from submission.
It doesn’t mean that the buyer will do (or has to do) it- it means that the seller has requested it. Perhaps the buyer has a specific reason that they can’t honour the sellers request.
Pro’s of an irrevocable period:
Let’s be honest with ourselves. The Sellers Direction that requests a specific irrevocable is not for the buyers benefit. It’s for the sellers. An irrevocable period buys the seller time so that they don’t have to react to an offer right away. And it may be for good reason.
We find many situations where a seller may need an irrevocable. Perhaps there are multiple reasons why a seller would like an irrevocable. This could include sellers being in multiple locations at one time in different timezones that require more time. It could be because of a separation or divorce and the sellers need to consult with their lawyer.
Coming out of a strong sellers market where most sellers are holding offers, an irrevocable period is a a somewhat welcome strategy. Buyers feel like “they have a chance” without competing. However, it’s still a long time to wait 24hrs after you submit an offer for the seller to reply.
As a seller, the irrevocable period allows you to continue to show the property once an offer is received, until the time you need to review the offer. It could potentially lead to additional interest on the property and multiple offers. An irrevocable prevents a buyer from snapping up a property before other people have had a chance to see it.
Cons of an irrevocable period
If you’re selling a house and have an irreovable, there are cons to an irrevocable period. As an example, let’s say buyer clients submits and offer on the house right after listing. The home receives less exposure because many buyers haven’t had a chance to see it.
This happens periodically, but even then Beth and Ryan have strategies for their seller clients to mitigate the impact of this situation.
Irrevocable pricing strategy also opens up the door to receiving a conditional offer. This may be on financing , inspection or even sale of property.
And of course, an irrevocable requirement is not mandatory. Just because a seller is requesting 24hrs irrevocable, it doesn’t mean the buyer will give that. If the buyer really wants the house, they may have an aggressive offer that expires in 5 hours. This is because the want the seller to accept their offer.
Need a Guelph real estate agent?
Beth and Ryan Waller are Guelph Real estate agents, you can reach them here with any listing related questions you may have! Our team would be happy to help!
