05.13.15 by Jeff Johnson
Multiple offers are a home seller’s dream. But when they come in, what do you do?
Receiving multiple offers means you’ve presented your home to the market in its best possible light and that you’ve positioned it correctly concerning price. But multiple offers can be stressful, because it may not be obvious which offer to accept. Here are some tips for evaluating multiple offers.
Identify the best buyer and work with them to make a deal
The best buyer isn’t necessarily the one with the highest-priced offer. If a buyer made a high offer just to “win” the bidding war, they might get cold feet or second guess their decision and walk away after inspections.
The best buyer has seen the home multiple times and has made themselves known to you and your agent. This buyer is likely working with a local agent, is pre-approved with a local mortgage professional. They may been in the market for some time to find what they really want.
A good listing agent will be quick to identify who is the best buyer. You want a buyer who is committed to the home and will close, barring any unforeseen circumstances. Once you accept an offer or sign a contract, the disclosure and inspection process begins.
Use the terms of a lower-priced offer with your best buyer
If you have a few offers, they may run the gamut from over-asking to lowballing. Don’t be insulted by any offer, because the more offers you receive, the more offers you have to work with for counter-offers.
If your agent can go back to the buyers’ agents and say “We’ve received four offers,” it will make the top two buyers want it even more. If your low-priced offer has a quick closing or offers to quickly remove contingencies, leverage those terms with the higher-priced buyers.
It’s helpful to take all prices and terms and try to get one buyer to offer you the best of each. If the best buyer didn’t come in at the highest price, counter them to match another offer’s price and terms.
Always try to get a backup offer
You don’t want to have to go back on the market. When that happens, you’ve lost momentum and may not realize that same price or terms again. Buyers who see a home go back on the market tend to get spooked or think there is something wrong with it.
If you have multiple offers, try to get the second-best buyer to agree to a backup position. If they won’t agree to it in writing, be sure that your agent maintains contact with them or their agent until the first buyer has removed all of their contingencies. If you can simply slip in buyer two later in the game, you should.
Multiple offers shouldn’t necessarily come as a surprise to a seller. If you study and know your market, you can plan for it. Talk in advance with your Realtor about what types of terms and conditions are important to your situation. When you have more than one interested party, you are more likely to create favorable terms and conditions for a successful, hassle-free sale.
Source: Zillow Blog