As the housing market continues to improve, some sellers are receiving multiple offers. Time and time again, I see agents dictating how these situations are handled without giving sellers all their options. According to the National Association of Realtors Code of Ethics Standard of Practice 1-15, agents are only able to divulge the existence of another offer on a property with the seller’s approval.
First of all, sellers aren’t required to let either party know another offer has been received. Often times, agents will notify all parties there are multiple offers and ask for the buyer’s highest and best offer by a certain deadline. The downside to this method is the auction / bidding war ends once the timeline for highest and best expires. As a seller, you want the bidding to continue until only one buyer is left. A second option is not to let either buyer know another offers exists and negotiate the best deal possible with the strongest offer. The drawback to this is you eliminate any potential for a competition / bidding war. A third option is to let one of the parties know another offer exists and use it for leverage in getting a higher price. Keep in mind you can pick any offer, the highest or the lowest, to negotiate with.
The most important thing to understand as a seller is that you have options and you should be the one making the choices, rather than having your agent dictate how multiple offers are handled.