In very tight markets like ours, REALTORS are navigating a lot of multiple offer situations. In many cases, advising clients about the qualities of each offer isn’t the hardest part. Managing the emotions and expectations on all sides is the bigger challenge. It’s important to keep the lines of communication open. Be honest with all parties and treat everyone fairly. The National Association of REALTORS offers many suggestions for how to handle multiple offer situations with your buyers in particular.
Advise buyers that there are several options for sellers in these situations. 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.
Remind your buyers that while the listing broker can offer suggestions and advice, decisions about how offers will be presented – and dealt with – are made by the seller - not by the listing broker.
Be sure buyers understand they may withdraw an offer if they know there are competitors or if a seller takes too long to respond in hopes of receiving multiple offers.
As a buyers’ agent, it is helpful to provide a clear summary of the offer to the sellers’ agent in understandable terms. Price isn’t the only consideration. Discount points, settlement dates, down payments, contingency clauses, financing provisions, and repair allowances can tip the scales. If the offer you’ve submitted has some strong points that might get overlooked because the numbers don’t jump off the first page, make sure to point that out in your summary.
If your buyer’s offer isn’t initially chosen, ask the seller if your buyer’s offer could be considered in a back-up position (with your buyer’s permission, of course). Get the back-up paperwork completed and turned back to the seller’s agent quickly.
When entering into buyer representation agreements, explain to buyers that you or your firm may represent more than one buyer-client, that more than one of your clients or your firm’s clients may be interested in purchasing the same property, and how offers and counter-offers will be negotiated if that happens.
Remind your clients that in multiple offer situations only one contract offer will result in a sale everyone else will be disappointed when their offer does not get accepted. The good news is that most people do end up in homes, and most do end up satisfied with the homes they purchase, even if they have to make several offers before one is accepted. Prompt and open communication, alongside fair and honest treatment throughout the process; will help your clients feel better if their first offer is rejected.