Multiple offers might sound wonderful for a seller, but it also has its ins and outs in the process.
When selling a home the optimum market price is not the only standard in approving an offer. The multiple offers should be weighed in carefully and consider other aspects of the process such as the fees the parties will shoulder, the terms of contract, the escrow and other matters that the seller and the realtor agreed with.
What are Seller Strategies for Multiple Offers?
Listen to your Realtor – The role of your Realtor is to help you with selling your home, as well as, presenting what strategies to use in multiple offers situations. Your Realtor can explain to you the various strategies you could use, as well as, the possible scenarios for each decision.
Make a deadline for offers – By having a deadline you are giving every buyer a fair chance to get their offer in. As for you, you can conveniently compare all the offers right at your fingertips. What is good in this strategy? It gives you , the seller, an opportunity to receive offers, possibly, higher than the listing price. It also makes your prospective buyers aware that there is competition but not exactly a bidding war. This can take prospective buyers out of the process since they will think that the listing price will go higher.
Weigh all sides - It is already a given that you should really study all the offers and take note of the buyers who are willing to be back-up buyers. You have to accept that whichever you choose in a multiple offers situation there will always be advantages and disadvantages. By weighing all sides you are prepared with your fallbacks.
Stick to your strategy – Choose a strategy that you and your Realtor agree on. Choosing a strategy will not only organize your selling process but will also give you better opportunities for the property you are selling.
Make and present your terms – After your buyers send in their offers and you have studied them, you are to counter the offers of your prospective buyers if there is a need to do so. These terms may include purchase price, type of financing, amount of earnest money, closing date, repair limit and others. You need to be cautious in doing this since most of the buyers do not want to be involved in a bidding war.
It is not only about the best offer – it is about the buyers agent too! It is not only about price and terms but it is also about the buyers agent. If I know a buyers agent and have had transactions with them – I will inform the seller of this. The highest offer is great, but if it comes from a realtor I know is not good and I think the deal might not go through – I will recommend another offer. The main thing for me is to get a price and terms that is acceptable to the seller and GET IT CLOSED.
Possible Risks with Multiple Offers
There are possible risks when having a multiple offer situation because there are many factors that are at play.
The appraisal might come in lower. If you are accepting an offer that is higher than asking price – be aware that the appraisal might not come in at that price. Your Realtor should check the comparable homes to make sure that the offer you accept has a good chance of appraising.
The buyer might terminate – The buyer is getting caught up in the frenzy of the multiple offer situation and realizes later that they went above their budget. Then they cancel.
Calling for a highest and best. When a highest and best is called – buyers might get scared off because they cannot offer any higher. This could result in a possible good buying pulling out.
It is always great to be in a situation that has multiple offers, but you have to be careful on handling them. You want to make sure you have the best price and terms, the best qualified buyer, and a buyer’s agent that will help to get the transaction closed. Remember to always be fair and reasonable in working with multiple offers. When choosing an offer understand that – there are always people who will be disappointed when their offer is not approved.