What Happens When a Home Seller Receives Multiple Offers?
You may have heard the term multiple offers and here is a description of what it means for the seller and/or the buyer …
If you are the Home Seller
You may be faced with multiple competing offers to purchase your San Diego property. As your listing broker I can explain various negotiating strategies for you to consider. For example:
- You can accept the best offer
- You can inform all potential purchasers that other offers are on the table and invite them to make their highest and best offer
- You can counter one offer while putting the other offers to the side awaiting a decision on your counter-offer
- You can counter offer one offer and put the second best offer in a backup position
- Or, you can counter one offer and reject the others.
Realize that each of these approaches has advantages and disadvantages. Patience may result in an even better offer being received; inviting buyers to make their best offers may produce an offer (or offers) better than those currently on the table or may discourage buyers who feel they’ve already made a fair offer resulting in them breaking off negotiations to pursue other properties. As your listing broker I will explain the pros and cons of these strategies (and possibly other) negotiating strategies. The decisions, however, are yours to make. As your listing broker, my advice is based on past experience and is no guarantee about how any particular buyer will act (or react) in a specific situation.
To go a bit deeper into the multiple offer situation consider this:
Perhaps no situation facing buyers or sellers is more potentially frustrating or fraught with potential for misunderstanding and for missed opportunity than presenting and negotiating multiple, competing offers to purchase the same property. Consider the following issues and dynamics:
- Sellers want to get the highest price and best terms for their property.
- Buyers want to buy at the lowest price and on the most favorable terms.
- Listing brokers acting on behalf of sellers represent sellers interests.
- Buyer agents represent the interests of their buyer-clients.
- Will a seller disclosing information about one buyer’s offer make a second buyer more likely to make a full price offer? Or will that second buyer pursue a different property?
- Will telling several buyers that each is being given a chance to make their best offer result in spirited competition for the seller s property? Or will it result in the buyers looking elsewhere?
What’s fair? What’s honest? Why isn’t there a single, simple way to deal with multiple competing offers?
Knowledgeable buyers and sellers realize there are rarely simple answers to complex situations. But some fundamental principles can make negotiating multiple offers a little simpler.
- The Code of Ethics obligates REALTORS to be honest with all parties, to present offers and counter-offers quickly and objectively, and to cooperate with other brokers. Cooperation involves sharing of relevant information.
- Frustration and misunderstanding can result from buyer agents being unaware of the status of the offer they have presented on behalf of their buyer-clients. Listing brokers should make reasonable efforts to keep buyer-representatives up-to-date on the status of offers.
Finally, buyers and sellers need to appreciate that in multiple offer situations only one offer will result in a sale, and the other buyers will often be disappointed their offers were not accepted. While little can be done to assuage that disappointment, fair and honest treatment throughout the offer and negotiation process, coupled with prompt, ongoing and open communication, can enhance the chances that all buyers and their agents – successful or not – will feel they were treated fairly and honestly.
As a listing broker, representing my seller’s interest, I will always do my absolute best to treat all people involved in the transaction, with respect and honest communication because keeping everyone informed is the right thing to do.
I hope this vlog about multiple offers helps to bring a better understanding and, as always, feel comfortable reaching out to me with any questions. I’m here to answer all your questions and alleviate all your concerns.