How To Handle Multiple Offers
In the past month Jay and I have been in 5 multiple offer situations. In one case the property had 5 offers on it in a period of 3 days.
Sellers love this situation because they almost always sell their property for more than they are asking. Buyers and their Realtors hate it because we know for sure that at least one person is going to go away unhappy.
Obviously, the seller holds all the good cards in these games. About all the buyer can do is make the best offer that they can and hope. But there are certain ways a seller should respond to treat everyone fairly while still getting the best price possible.
Unless one of the initial offers is obviously so good that there is little chance that a better offer can be had, a seller should respond to the multiple offers by giving all interested buyers a period of time, (usually 24 hours), to present an amended offer. The reason for this is that the very first offer that came in did not have the advantage of knowing that they were competing with other buyers. The first buyer made their offer thinking that they were the only interested party and likely made the offer lower than they would have had they known about the competition.
Almost always at least one of the buyers is willing to raise their offer. There is the slim chance that both buyers will refuse to cooperate and walk away but it rarely happens. If neither of the amended offers are good enough for the seller to accept, he can always decide to counter one of them at a price and terms he will accept.
Every transaction must be handled carefully and the situation may call for different tactics, but the above is generally the best route to go.
Most experienced Realtors already know how to do this, but I’m posting it here because in one of the four multiple offers we had this month, these procedures were not followed. Our buyer lost out because even though he made a full price cash offer, the seller accepted one of the other offers without giving all parties a chance to amend their offer. The seller lost out because we know for a fact that our buyer would have raised his price by at least $10,000 over the final closed price had he been given the chance.