Multiple Real Estate Offers: Fun for Sellers and Buyers!

Writing a purchase offer for a Buyer-client and presenting it to a Listing Agent is pretty common although all agents are not created equal. Let’s leave that for another post.

Accepting a purchase offer from a Buyer’s Agent and presenting it to your Seller-client is also pretty common with the same disclaimer.

However, what may be like “playing checkers” (I do not mean to minimize the process or related emotions!) quickly becomes “playing chess” when there are multiple offers being generated for the same property. Many things can go wrong and someone is likely to feel left out.

Most Buyers tend not to like competition (last decade they ran towards it like a moth to a flame. Today, especially in areas with ample inventory, not so much) whereas Sellers love it although it can get complicated and, just because more than one prospect decided to make a formal offer, there is no guarantee that the Seller will enter an agreement with any Buyer.

A wise Buyer Agent will inquire about the existence of other “interest” or other offers prior to writing an offer.  Some ask to be kept advised if anyone else show interest. They may, can and will ask a series of questions designed to learn as much as possible:  is there competition/ other interest?; when do we need to get our offer in?; how much will it take and under what terms and conditions?; if there are other offers tell me who represents the Buyer (what they mean is is the Listing Agent a Dual Agent representing both parties)?; if there are no offers have any been rejected and if so what was the highest rejected price? It could go on and on and on. So, how does the Listing Agent answer any questions?

REALTORS are “fiduciaries“, meaning that we act on our Client’s behalf with their specific permission. When we do anything, it is expected that we do so with their prior consent as what we do may and will be perceived as obligating them. Going rogue is NOT an option! Our duties include: obeying their lawful instructions, being loyal, disclosing what we know, keeping what they tell us confidential, providing an accounting for any monies involved and providing reasonable care and due diligence in our actions. The center piece, if you will, of being a REALTOR is our time-honored Code of Ethics. Established in 2013, our COE has 17 Articles (with Standards of Practice) split into three sections describing our duties to Clients and Customers, the Public and other REALTORS. Article 1 requires that “REALTORS pledge themselves to protect and promote the interests of their clients” while treating all parties honestly.

Our PAR listing contract requires that we obtain the Seller’s permission to disclose the existence of other offers as well as who (the Listing Agent, another agent in the same firm or someone from a different firm) obtained any offers. Two points:  first, someone must ask the Listing Agent the question (there is no specific obligation for the Listing Agent to make someone aware unless the Seller directs that action); second, we must be honest OR say that we are not authorized to discuss that. The best time to discuss this is when the listing contract is being signed or responding to the questions will be awkward (geez, I am not sure. Let me ask the Seller???). Most of the hypothetical questions mentioned are NOT covered in the PAR listing contract but I assume, as with any aspect of representation, the Principal (the Seller or Buyer) decides what we do.

In my experience, many if not most Buyer Agents do not ask about the existence of other offers which can disadvantage a Buyer who is not aware of competition (Buyers may not get a chance to change their offer. A good agent must discuss whether their Buyer-client wants to make their “best offer” or is willing to see what happens). In fact, many Buyer Agents email or deliver purchase agreements without advising the Listing Agent which could cost a Buyer the house they want if there is other interest. There are often times when I interact with Agents and, frankly, I am not sure whether they are expressing their own opinion or their Client’s. When that happens I will ask as I then need to advise my client.

As far as Multiple Offers, markets differ and I would never assume that there is OR is not competition. In my opinion, it is wise for all Buyer’s Agents to contact a Listing Agent prior to preparing an offer (of course, that may not be possible for a variety of reasons) to learn what they can. In the absence of that conversation, prepare your Buyer as best you can. I advise my Buyer clients to do what they feel comfortable doing do that there will be no regrets.

Listing Agents need to know what latitude they may have (document it! Sellers may have a change of heart when giving verbal instructions). When there are Multiple Offers, the Listing Agent is somewhat in control and has two or more Agents and their Clients waiting for instructions. Negotiations can get difficult and, no matter how happy the Seller and you may be, you do not need lingering feelings that someone was not treated honestly.

As for Sellers and Buyers, you may never need to know any of this. However, better to discuss it when you don’t need it than to learn as you go.

HIRE WISELY!

 

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Is it Time to Sell?

The answer truly depends!

Selling a house or, for that matter, selling any piece of Real Estate is a major commitment.  Let’s focus on selling the house you live in.  A seller is in TOTAL control for a little while.  They/ you get to decide with whom to speak, whom to hire, how much to a$k and when to start and end the contract.  Then the process starts to exert some control.  Sure, you can accept or reject appointments and make the house look as presentable as possible or NOT!  You can even reject an offer without explanation.  However, there are unfortunately some things out of your control.  They include but are not limited to the following:  the market (your competition, their asking and selling prices, interest rates, ease of qualifying for a loan, etc.), who will bring buyers to your house, who will want to see your house, whether people arrive on time or not, whether they show up at all, whether the buyer is serious/ pre-approved, and more!

For better or worse, there are many variables and even with all of the planning in the world, this can be a very frustrating process that will NOT get better if delayed.  I firmly believe that a good agent can help prepare you, work closely with you to keep things “on track” and, hopefully, get you to the finish line faster!  Would you rather it take a week or several months to sell?  Of course that depends on how time-oriented your plans are (moves involving children and schools or changing jobs may be more time specific than other reasons for moving).  Generally speaking, over-priced houses tend to take longer to sell and those owners tend to get less than they would have achieved had they been more realistic from the start.

All of this boils down to what YOU expect.  Some sellers wait, thinking their “present” market is not attractive, some think that buyers won’t be out in certain type of weather or during certain times of year and others come up with other ideas.  DELAY, DELAY , DELAY!!!  The truth is this:  houses sell EVERY day of the year!  Buyers out looking during rough weather or during holidays tend to be serious.  Whatever your thought process is, there is no guarantee that your house will sell if it is on the market but it is almost a sure bet that it will not sell if it is not on the market.

Talk to a professional such as myself to turn over all of the stones so that you can make a plan that works for you!  As with most things in life, the hardest part is getting STARTED.  Of course, if you have tried selling before and had a bad experience I fully understand that you may be reluctant to start over.  I have been helping sellers since 1996 and most of them had at least one agent before they met me.  Have you ever had a bad steak? Unless you are a vegan, I bet that one bad steak did not stop you from trying another one!  Of course, you probably ordered the next one some place else.

Be prepared and HIRE WISELY!

Thank you for reading!  Visit my web site or contact me if you would to discuss your plans.