Based on the current competition due to lower than normal inventories, it is possible for a seller to find themselves on the beneficiary side of a multiple offers. Two or more parties may be trying to buy your home at the same time and because of the competition, they increase the purchase price, possibly, remove unnecessary contingencies and try to make their offer as attractive as possible.
This can pleasantly result in you realizing higher-than-expected sales price and proceeds of sale. While it may not materialize, it is good to understand what could happen and the best way to handle it. Your real estate professional is positioned to offer you specific advice but the following are some things to consider.
One tactic is to delay showings for a short period of time. Some agents will create this by putting a sign on the property with a rider that indicates “coming soon” and depending on the local MLS rules, it may even be put in the system. No showings will be allowed until a publicized date, usually, a few days, at which time, the goal is to have prospective buyers standing in line to see the home.
This might even be combined with an open house scheduled for the initial showings. Agents using this method have sometimes found lines of people waiting outside the home to see it first.
When multiple offers are made, invariably, there will be some disappointed people and for that reason, it is essential to follow a strict procedure to see that no one is given an advantage over other buyers. Discuss the following suggestions with your professional:
- All offers are countered by asking the buyer to make their “best and final” offer which will include not only price but terms also.
- The seller may authorize the listing agent to disclose that there are multiple offers. (Article 1, Standard of Practice 15 of the National Association of REALTORS® code of ethics.
- Discuss with your professional their thoughts on revealing information, like price and terms, on other offers you are considering. In most cases, they are allowed to do so with your permission, and it may make a difference in the negotiations.
- If one offer is substantially better than the other offers, the seller can accept or counter-offer.
- Have your real estate professional advise you of countering more than one offer which could result in contracting to sell your home to more than one person. They can advise you alternative ways to do this.
Keep this in mind. Sometimes, the highest offer is not the best offer. Even though the buyer is willing to pay a high price for your home and possibly, willing to remove the financing condition, if they are going to get financing and it doesn’t appraise, it can cause issues. You will need to ask for proof of funds from a cash buyer or confirming their ability to pay above appraised value.
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