In the current real estate market, with many buyers and few sellers, it is not unusual for multiple offers to be made on a property.
When multiple offers are made, the process of getting a home sold needs to be managed in a business-like manner. If that process is not handled properly, it can create stress and bad feelings for all parties involved.
Both buyers and seller need to consider what will happen in a multiple offer situation. The best way to do this is to think ahead and have a plan in place.
Here are some tips that will help you manage the process in an orderly way
What Sellers Need to Know
The seller is actually in control of the entire deal. If you are the seller, you need to set up some clear rules before listing the home and stick to them. There are any number of alternative ways to get to a final deal. By choosing one in advance, you will not only have the best chance to get the highest and best offer, you will also avoid bad feelings later.
Structure the process for handling the bidding process – IN ADVANCE:
- You can have your agent tell prospective buyers that you will accept the “best” offer and tell them to make their offer their “final and best” one
- You can wait for offers to be made and THEN
- Inform all the prospective purchasers that other offers are “on the table” and invite them to make their “final and best offer”
- You can counter one offer and hold onto the other offers while waiting for a reaction to your counter-offer – OR just counter one and reject all the others
- Don’t hurry the process. It’s best to give everyone plenty of time to see the home and review their own circumstances. Remember, as a seller, you may actually do better by not accepting the first good bid by allowing additional ones so you can get a GREAT price
What Buyers Need to Know:
No one should feel that this is a “life or death” situation. Some buyers get desperate because they have lost out on multiple properties and may feel pressed to do “whatever it takes” to finally make a purchase.
- Try not to make a decision based on an impulse
- Understand how the process could work and be prepared to deal with the possible consequences
- As a buyer, you need to have a clear head and not be swayed by feeling “If we miss THIS one, we’ll never find the right home”
- Rushing into a home purchase can have disastrous results. To put it mildly, everyone can end up in a terrible situation if a deal falls apart at the last minute
Agents involved should communicate with everyone involved in the transaction, especially the people who submitted offers.
- Let everyone know what the timeline is for responding to offers
- Most importantly, let everyone know what happened once an offer has been accepted
- Be a role model by being nice – and encourage all parties to do so also. Everyone is feeling pressured and only one party is going to win the bid and the others will be disappointed. It’s always a good idea to maintain positive relations among all parties
- Make sure to remind ALL those involved to be SURE that they not only want to make a deal, but also are comfortable with their participation. The last thing anyone wants to do is to get right up to the point of closing and have the deal collapse because of:
- A buyer overbidding and not be able to finalize financing
- Buyer remorse at the last minute leading to their trying to bow out of the contract
- Arguments over final details involving improvements that may be needed after a purchase price has been agreed upon
Real estate transactions don’t need to be a trial by fire. Smart agents help to control the negatives by working with clients and gently reminding them that this is not war, it’s a purchase.