Multiple offer situations—commonly referred to by the public -as “bidding wars” are common in our current and local market.
In short it is a great situation for the Seller who gets to look different offers and make a decision with their Realtor based on the price and conditions in each offer. For the Buyer it can be extremely frustrating and exhausting. I’ve had buyers offer over asking price three times and still not get an accepted offer. To a Buyer it can feel like a “roll of the dice”!
Here is how its to play out…the Seller’s Realtor must inform all Buyers of this information.
- the number of signed offers that have been submitted;
- whether any of the buyers are represented by the same
brokerage as the seller; called Multiple representation
- whether the seller’s brokerage has an agreement to reduce their commission for buyers who are represented by a certain brokerage.
- Keep a record of all offers and copies of submitted offers
All offers are sealed bids until the Realtor representing each Buyer presents or submits their offer, so you won’t know how much other buyers are offering, or any terms they’ve included in their offers. When a Buyer makes their offer they should consult their agent to put together your best offer, and hope for the best. I always tell my clients to come with their “Highest & Best” offer; meaning the most we feel the house is worth paying for and least amount of conditions.
The seller can choose to accept your offer, reject it, or make a counter offer. Sometimes a seller will give one or more buyers a chance to “improve” their offer, but you may get only one chance.
In a hot market like we are in now, when there are more buyers than sellers, it’s understandable that buyers can become frustrated, I warn my clients that it may take 2 or 3 offers before we get one and especially don’t fall in love with the house until you are making the payments for it!
My advice for multiple offer situations is always: think carefully before deleting conditions from your offer like a home inspection or financing, and plan ahead so you know how much you can afford and let me give you a max price so you don’t over pay and end upside down on a home in a 1-2 years.
If you are thinking of moving this year, give me a call and I’d be happy to discuss your options.