You have worked with your agent to get your home ready for sale. You have planted bright flowers in the front yard, touched up worn paint on the staircase and had your carpets cleaned. The first weekend finally came and the potential buyers and their real estate agents streamed through. You priced the property competitively to sell. As the weekend draws to a close, you see your agent calling.
Deep breath…and you answer!
“We have multiple offers!”
You can hardly believe what you’re hearing, that’s great news. But then again, what do you do with multiple offers. This is where your REALTOR will help guide you.
Believe it or not, responding to a multiple offer situation can be tricky and must be handled carefully. While you have offers to choose from, the buyers also know that they are competing with other buyers and might continue to shop for another home as well. Some buyers could fall away simply because they do not want to be involved with a bidding war for a home, so multiple offers is not necessarily just an opportunity to get more money for the home, it’s about much more.
First thing your real estate agent will do is communicate with the buyers’ agents to let them know the situation. It is up to the seller to decide if they want to disclose the fact that they have multiple offers. You will want to discuss strategy for handling the offers with your trusted agent and give the buyers a realistic timeline for response. It’s important for your agent to let the buyers know that you appreciate their offers and value them. Next you will talk with your agent and discuss each offer in detail. Look at not only the offer price, but the terms….when can they close, how large is the deposit and down payment, what does their lending situation look like, what contingencies are they asking for, understanding which buyer is more likely to be in a position proceed.
The best buyer offer might not be offering the highest price. It could be someone who has offered to remove the appraisal contingency and is putting 50% down on their loan. The point is to determine who is serious and who will close. Then you will respond to one of the offers.
Agents from Calgary, Airdrie, Strathmore, Okotoks, etc who belong to the Calgary Real Estate Board (CREB) must follow all board rules on multiple offers. Under no circumstances may the price or terms of a purchase contract which is under consideration be disclosed as a means of obtaining a better purchase contract from another party. The price, terms or conditions shall not be disclosed, except to the seller.
You can always add a seller's condition, that will allow you to counter an offer more than one offer without the obligation to sell to that buyer if they agree. (Did you know that if you send a traditional counter offer to a buyer and they sign it before its expiration, you now have a valid contract? You certainly don’t want that situation with more than one buyer.)
You are not obligated to counter each buyer with the same price or terms either. You might like the terms of one offer but the price is too low while the other offer has a great price but won’t close for 2 months. These counters might look very different from each other.
Finally you and your agent will determine how many counter offers to send out. You might want to counter all of them or just a few of them. That will also be strategic. If your agent has been able to reach the buyers’ agents then they can gauge the buyers’ interest and this can help you determine which buyers you really would like to work with…the general goal is to respond to the serious buyers. The agent communication is also critical to make sure the buyers know that they are important also and to keep them from losing hope….or interest…while the countering process continues.
Multiple offers are exciting! They offer you a great opportunity to sell for the maximum price with the best terms. If handled properly, you will find a buyer that offers the best possible terms. If mishandled, you might lose them all. Fortunately, an experienced real estate professional can guide you through this whole situation.
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