Multiple Offers from a Sellers Standpoint
It is Soooo exciting! And Stressful! And Nervewracking!
You’ve sat down with your Realtor®, viewed the comparables and arrived at a price you want to list at. Your paperwork is all done and soon you will be listed on MLS®
We are in a seller’s market, everyone says so and the statistics back it up and I am betting you’ve asked your Realtor® what are the chances of getting multiple offers.
You are hearing about them on the news, your friends that just bought a house have been in one, your neighbour down the street was in one, and there are agents practically guaranteeing one for your house.
So, are you going to have multiple offers or, gasp – a bidding war, on your house?
Maybe, maybe not.
There are many factors as to why a house ends up with multiple offers and unfortunately Realtors® don’t have crystal balls. We can offer an educated guess based on location, current market activity and price, etc. but sometimes it could be simply the difference between listing one week or the next. We personally have seen a house that has been on the market for upwards of 90 days suddenly end up with multiple offers (unfortunately just when our clients put in their offer!).
We have also seen houses that you may expect end up in a multiple offer not.
Multiple Offer vs. Bidding War
But let’s back up a bit and talk about the difference between multiple offers and a bidding war and yes, there is a difference.
A “multiple offer situation” is simply when you the seller receives two or more written offers. New legislation (Bill 55) comes into effect July 1, 2015 requires that offers be in writing, signed and registered with the brokerages. Often the seller enters negotiations or simply accepts the strongest offer.
A bidding war often involves further oral negotiations or returning to all the buyers and saying there is a stronger offer and asking if they wish to put in a better offer. Sometimes multiple offers can escalate into bidding wars.
Setting the Scene
The potential for multiple offers on your home will depend on - well you and your home. If you are in a likely area to have multiples, it might not hurt to be prepared for it. An often seen method, and frankly our preferred way, is to set a date to review offers. It is usually between 5 and 10 days after listing. This can take out a lot of the strain and stress. For the first X amount of days, your only concern is to keep the house immaculate and be ready to head out frequently. That can challenging enough, especially if you have small children or pets to consider. At the appointed day and time, if you have received any offers, you sit down with your Realtor®, review, make decisions, counter offer etc.
There are a few advantages to this method other than just scheduling.
- It gives time for a sufficient number of buyers to have a chance to view the property – more potential buyers, more potential offers.
- The offers are more likely to be solid, clean offers with buyers ready to go through with the deal rather than be rushed and get cold feet later.
- The negotiations are likely to be much shorter rather than drag out for a number of days.
- If you have a “hot” property, it can be a very busy time and you may have the inconvenience of showings longer than necessary.
- How will you feel if there are no offers? Some buyers refuse to submit offers if there is a multiple offer situation.
- Bully offers – other Realtors® who attempt to have offers presented before the deadline.
- Overbids to get the property and then use inspections, etc. to bring the price down later.
It is your house and it is your decision
How the presentation is to be handled is always your decision as a home owner. Offers are registered with the brokerage but some Realtors® like to be able to present directly to the seller. The reason can be as simple as being able to present their clients’ situation, maybe pull on your heart strings, or an attempt to overwhelm you with numbers, personality etc. Do you want just your Realtor® there or do you want to hear out the rest? Do you want to have them waiting outside for your decision or time to think over the offers. These decisions are yours to make and just because an agent wants to present directly, doesn’t mean that you have to allow that.
What to do with the Offers
It has all worked to plan - you’ve suffered through your showings and you have received multiple offers. Now what do you do?
What takes place with the offers has a lot to do with the offers themselves.
- One offer may stand out from the rest and you just want to accept it as is.
- One might be really good but a little negotiation might be involved.
- They are all competitive so you send them back to the buyers.
- None of them are any good so you don’t respond.
Every Realtor® should be ready to handle a multiple offer situation, whether planned in advance or not and this is really just a brief overview of one method for handling a multiple offer situation. The key to remember is that you, the Seller, is in charge and your Realtor® is there to help facilitate and advise. You may not be in a home or area that will generate multiple offers but these days it is best to be prepared.
If you would like more information about how we can help you or any of our services, please contact us.