How should sellers handle a multiple-offer situation?
A: Pop the bubbly. But first, you should review all offers side-by-side with your agent so they are easy to compare. Keep in mind that the best offer is a combination of high price and favorable terms. One offer may not have all the best parts, but it is possible to construct an ideal “Franken-offer” from the best parts of the offers that were received, and make a counter-offer back to interested buyers with those terms.
This allows you to get your best price along with the other terms that are most important to your individual needs, be it a fast closing, a long rent-back, or a lack of contingencies. When the keys do change hands, your agent should be the one giving the toast. Cheers.
A: When sellers receive multiple offers in today’s market, they should feel very fortunate and lucky, as it does not always happen.
It generally means that they have priced their home well or have a very special property that many people want.
If it is considered a “hot” house, agents normally have been in touch with the listing agent prior to presentation, and know that they have to come in with their best offer.
Traditionally that means a bid over the ask price and no contingencies (only if sellers have provided extensive disclosures)
In my experience one offer is often stellar and goes way over the others, but not all the time. You can get a few grouped together and then you have to decide how to handle that.
Everyone knows it is a multiple offer situation and one can presume that buyers have put their best offer forward. I would encourage the sellers to simply accept the best one, unless there are 2 that are almost identical.
I do not like multiple counters, but occasionally they are the only good response. In that case I would come back with a definitive counter to both buyers and not just say, “come back with your highest and best” because then buyers feel they are bidding against themselves.
Anian Pettit Tunney, the Grubb Co.
A: There’s no one correct answer as to how sellers should handle multiple offer situations, just as there is no one answer to how sellers should respond to a single offer. Under both scenarios, the solutions may be different depending on the goals we are trying to achieve. Is it price? Is it timing? Is it terms? (Or is it all three?) The difference; however, is that when dealing with multiple offers, there’s the opportunity to “cherry pick” the best of each, thus we might respond to the most favorable terms by upping the price, or conversely, respond to the highest price by improving the terms.
While nine out of 10 offers may want a quick, clean close, the tenth may actually need time in the home to finish the school year. Certainly, there are more options to consider and far more interest to leverage when dealing with multiple offers. Still, my favorite multiple-offer scenario is one where a single offer stands out from the pack, making the seller’s decision crystal clear and removing the desire to work one buyer off the other. My least favorite: “Please write your final and best.” (That provides no direction.) Thus when writing in competition, the goal should be to write definitively in order to avoid “multiple counters;” no one nudges out second place by a hair when there are several interested parties.
In short, if it’s the house you’ll regret losing, write to win.
Julie Gardner, Compass