Multiple offers create a complex situation where it is very easy to have misunderstandings between the many parties that are involved. Each party comes to the table with a different set of dynamics, objectives, and priorities. Sellers want to get the highest price and the best terms. Buyers want to buy at the lowest price with their preferred terms, but also to have the winning offer. And each agent is trying to represent the best interests of their clients. Whew!
When you are representing a seller in a multiple offer situation, it is important to remember that the seller ultimately makes the decision about which offer they want to accept. As the agent, it is your job to present them with all the facts and options they have available to them.
When representing your seller you have to juggle many options for the multiple offer may be handled and there is a bit of psychology involved:
- What are your strategy options for this listing?
- Will a buyer be more likely to offer more if they know that they are competing against many buyers or will this turn them off?
- If a seller discloses that they have many offers and reveals the highest offer price will the other offers compete or will they walk away?
- Will giving all buyers the opportunity to make their best offer result in a higher offer?
- Will buyers walk away if they feel there is too much competition?
These are all excellent questions that need to be very carefully considered. If your sellers counter any offer there is the potential of losing that buyer so you need to be very specific and completely transparent with your seller about their options and potential consequences of each.
Some sellers opt for choosing the “best” offer right off the bat and not countering. Other sellers want to send all offers back and tell the buyers that they have a higher offer and they need to come back with a higher offer. However, this can be very risky and only the seller can decide if they want to take that risk. The seller may also “counter” one offer while putting other offers to the side while waiting for a decision on the first offer. With so many choices it is a wonder why agents – and their sellers – can get overwhelmed.
If you have questions about the legalities involved with the correct protocol for working with multiple offers, ask your managing broker to explain your options and alternatives. Always remember that putting your clients’ legal welfare first is paramount, you can only disclose what the seller has given you permission to disclose, and your seller is ultimately in the driver’s seat.
There will only be one offer that will result in the sale and because of that you may have many upset buyers and agents who might question how you handled their offer. While you may not be able to control how they feel about losing the offer you can control your actions towards them. They took time to bring you an offer so you need to make sure you always respond in a timely and prompt manner and thank them for their time and effort. You might be amazed at how impact this one little step can have!
There are so many possible approaches to handling multiple offers. Each has advantages and disadvantages, but the key is to clearly explain all the options to the sellers and to let them choose the option that they are most comfortable with.