September 19, 2016 1:45 am
Multiple offer situations, or cases in which more than one competing offer is placed on a home, can be challenging for a homebuyer, especially one new to the process.
Knowledge is half the battle when navigating the multiple bid minefield. Below are insights and tips from the National Association of REALTORS® (NAR) all buyers should be mindful of.
• While a listing agent can offer advice and suggestions, all decisions about how offers will be presented—and dealt with—are made by the seller. Your agent likely has other buyer clients, some of whom may be interested in the same properties as you are, so ask how offers and counter-offers will be presented and negotiated.
• Sellers can handle multiple offers in the following ways: accept the “best” offer; inform all potential purchasers that other offers are “on the table;” “counter” one offer while holding others awaiting a decision on the counter offer; or counter one offer while rejecting the others.
• Generally, purchase offers are not confidential—in some cases, sellers may make other buyers aware that your offer is in hand, or even disclose details about your offer to another buyer in the hope of convincing that buyer to make a “better” offer. You may want to discuss the possibility of making an offer confidential, or establishing a confidentiality agreement between you and the seller, with your agent prior to negotiations.
• There are advantages and disadvantages to various strategies. A low initial offer may result in obtaining the property 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 instances, there can be several full price offers competing for the seller’s attention—and acceptance.
Keep in mind, most importantly, that your agent’s guidance is based on experience, and is no guarantee as to how any particular seller will act (or react). Above all, your best line of defense is an agent seasoned in multiple offer situations.
Published with permission from RISMedia.