Handling multiple offersWritten by Jody Zink | | email@example.com
A multiple-offer situation occurs when more than one buyer shows interest in buying the same property at the same time. Few situations facing buyers or sellers can be more potentially frustrating. They are ripe with potential for misunderstanding and missed opportunity. It makes some people want to stand near the toilet.
As a seller with more than one offer, confidence sometimes sets in. Some sellers see it as an opportunity to ignite a war between buyers until one party is left standing. Most buyers don’t appreciate this, especially when the price goes above market value. Expect them to become disinterested or make up for the inflated price by being difficult during escrow with inspections and contingencies. In a buyer’s market where buyers can often choose between 30 other properties, don’t be surprised when a buyer moves on. Greed can leave a seller empty-handed with no buyers in sight.
Sellers risk less by choosing the price-satisfied, well-qualified buyer. Let’s get crazy and say an owner gets 10 offers on his home. As a listing agent representing the seller, I would suggest first considering the buyer’s qualifications.
Let’s say three of the offers are cash offers. The other seven may be set aside. Buyers offering the most cash forward would likely win out and be given notice of highest and best.
If one of the cash offers is highest, it might be accepted on the spot, and the other two accepted as back-up offers, but it might not necessarily be the highest. Perhaps the terms are better on one offer and a buyer is more flexible with the closing and possession dates. Perhaps a buyer’s lender is more reputable. A seller could counter all three cash offers, but also run the risk of ticking everyone off, thereby losing his best buyers.
Now for purchasers, as a buyer put on notice for his highest and best offer, it’s important to know you may not get a second chance. By the same token, you should only go as high as you feel comfortable. Your Realtor can offer suggestions and advice on other similar properties nearby that have sold, but decisions are made by the buyer. Also, be aware that even a full-price offer does not guarantee you will obtain the property. Other offers may go above list price or may have more attractive terms, such as financing or possession dates.
Keep in mind: If the seller counters your offer, your offer still remains at risk. There’s the possibility the seller could rescind the counter offer and accept another offer before you’ve had an opportunity to consider it and respond.
In these situations, buyers and sellers alike should appreciate that only one offer will result in a sale, often leaving the other buyers disappointed. While little can be done to alleviate those feelings, fair and honest treatment throughout the negotiations process goes a long way. Prompt and open communication improves the chances that everyone, successful or not, will feel they were treated fairly and honestly.
Jody Zink is a licensed Realtor in Ohio and Michigan with the Loss Realty Group. She can be reached at (419) 725-1881 or through her Web site at www.JodyZink.com.