(Nov. 8, 2019) In a strong real estate market with lower inventory, the likelihood of multiple offer situations occurring increases.
There are various ways multiple-offer situations can be handled, and the ultimate decision on how to handle them lies with the seller.
The National Association of Realtors provides A Buyers’ and Sellers’ Guide to Multiple Offer Negotiations, which is excerpted from the Code of Ethics and Arbitration Manual. The guide lists tips for buyers and sellers involved in a multiple offer negotiation.
A sampling of the buyers’ tips include:
• Sellers have several ways to deal with multiple offers.
Sellers can accept the “best” offer; they can inform all potential purchasers that other offers are “on the table;” they can “counter” one offer while putting the other offers to the side awaiting a decision on the counter-offer; or they can “counter” one offer and reject the others.
• A low initial offer may result in buying the property you desire for less than the listed price – or it may result in another buyer’s higher offer being accepted.
On the other hand, a full price offer may result in paying more than the seller might have required. In some cases there can be several full-price offers competing for the seller’s attention.
• Appreciate that your buyer-representative’s advice is based on past experience and is no guarantee as to how any particular seller will act (or react) in a specific situation.
A sampling of the sellers’ tips include:
• Your listing broker can explain various negotiating strategies for you to consider when faced with multiple offers.
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 “best” offer; you can “counter” one offer while putting the other offers to the side awaiting a decision on your counter-offer; 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 “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. The decisions, however, are yours to make.
— Lauren Bunting is an Associate Broker with Bunting Realty, Inc. in Berlin.