What to Do When Multiple Offers Come In

by c21commonweath_ldowling 6. August 2018 15:16

The Real Estate Game

Selling or buying a house is an exciting endeavor. Homeowners embark on an emotional journey as they start a new chapter in a house that’s about to become a home. Buyers do the same as they search for the perfect place to put down their roots. It’s a time of reflection and new beginnings.

But the process isn’t all fun and games, and things can get stressful when multiple buyers make an offer on your home. The competition has begun, and it’s important you play your cards wisely. So, we’ve gathered some helpful information to help stack the cards in your favor. If selling a home, you want to get the most out of your property sale, and if buying, you want to competitively position yourselves against your counterparts.

Understand Sellers Have the Upper Hand
Sellers run the game, and they position themselves to see how things play out in front of them before making any final decisions. Sellers work with listing agents to handle multiple bids – if a property attracts much attention. They decide on the most appealing offer after considering price, closing dates, and the amount of money a buyer is financing. After thoroughly vetting multiple offers, they may walk away with more than their asking price.

Homeowners are lucky to receive multiple offers, and if they do, they typically proceed in one of three ways. They may reject all offers, finding no offer acceptable. Or the seller may reject one of the offers and continue to work with the others. In this scenario, the seller should consider making a counter-offer to the remaining buyers, prompting them to up their bids. In the third scenario, the seller accepts one offer and rejects all others – the most ideal!

But once an offer is chosen, another may come through – and it may be nice and shiny. The seller may proceed with the last-minute offer to the dismay of the original buyer. Feelings may be hurt. People may be mad. But the seller still has the upper hand. 

Sellers are Legally Protected
A listing agent has a fiduciary responsibility to their seller clients and works to ensure they receive the best terms and conditions. It’s written in the Real Estate Code of Ethics that realtors, when acting as listing brokers, must submit all offers and counter-offers until a close has been made, the contract ended, or the seller waives the privilege in writing. Even last-minute buyers can swoop in with a promising offer. 

Sellers also allow brokers to disclose to other prospective buyers whether an offer has been made on the property. While potentially jarring for other candidates, this tactic encourages a healthy amount of competition, and the seller has a better chance of walking away with more money.

How to Buy

It’s clear there’s a game to be played – so how should buyers go about playing it? Understanding the seller’s exact list of terms and conditions makes any prospective candidate more attractive. If working with a realtor, they should explain the seller’s conditions, bettering your chance of success.

It’s also wise to consider more than a seller’s price. Consider extending a closing date if its beneficial to the seller. This could be a huge convenience for a homeowner who’s already swamped with packing, kids, and trying to sell a house. If they need more time, grant them that luxury – or consider moving promptly if the seller wants to. If you’re flexible, you may be rewarded – with a house!

To better polish your offer, shorten the time it takes to get an inspection, shorten the mortgage contingency rate, and increase the standard escrow deposit for the area in which you are buying. These strategies will make you a frontrunner in the competition for your dream home.

Get What You Want
As a seller, you have the right to review all offers before closing a deal, and you're legally protected by a listing agent who works with your best interest in mind. You only need decide what factors are most important to you when weighing the pros and cons of multiple offers. You’ve invested in your home and lived in it with love, and you deserve to get the most out of your sale. As a buyer, learn the exact terms and conditions of the seller to help seal the deal on your dream home. The work will pay off with a beautiful home you love for years to come.