Category: Buyers Agent (2)

Multiple Offers

Multiple Offers

While you may think that receiving two or more offers on your home is a great situation it actually presents some disadvantages. For properties that sell with a single offer, the fallout rate is 10 percent. For properties where there are two or  more offers, the fallout rate increases to 50 percent. The reason there is such a significant difference in closing  rates is that Buyers often feel they were unduly pressured by the multiple-offer situation. After Buyers have time to reflect upon the situation, they often get cold feet sensing they were pressured or paid too much. To minimize the fallout and improve your chances of success here are a few tips on how to best handle multiple offers when you are the Seller.

1. Try to have a Manager present. 

Your Agent’s company may have a variation on this policy; still it is good practice to request a Manager or third party be present. The Manager may ask the buyers’ agents and you to come to their office since they will be overseeing the multiple-offer process. This gives your representative Agent the best control of the situation as well as insuring that your Agent will have all the tools they need to handle the  situation.

2. It may be legal to shop your offers, but is it the right thing to do?

Whether it is legal or not to tell the Buyers how much the competing offers actually are, it may be simply unethical to disclose the  contents of competing offers to others. First, ask your Agent about the regulations in your area. Even if you do have the right to disclose the other offers, creating a bidding war may often results in buyer remorse that can increase the odds of your sale falling apart later. Instead, ask all Buyers to bring back their best offer.  This increases the probability that your deal will actually close.

3. Logistics.

Your Agent should explain the presentation guidelines to each party who  presents their offer prior to hearing the offer. This includes deadlines for counteroffers and how they will be presented. If the buyers’ agents are presenting  their offers in person, allow them to present their offers privately, one at a  time.

4. It’s the sellers’ house, and it’s the sellers’ decision.

You (the Seller) decide which offer you want to accept, or if you want to counter all the offers. If you decide to make a counter-offer, you should only counter one offer at a time.  Although Sellers may counter offers any way you choose, be  advised that if you make too aggressive a counter-offer it increases the possibility to have both sets of buyers walk away from the situation. Remain sensible about the real value of the property in light of your apparent windfall of interest.

5. When the Listing Agent has their own offer.

If your Listing Agent has their own offer on the property, ensure that you receive a prior explanation of Agency and how all the parties are being represented. In these instances it is common to have the Brokerage Manager present to ensure that other Buyers had their offers presented in an unbiased fashion.

6. Avoid selling your Home twice.

If you have an existing pending offer that is subject to a Buyer’s condition (ex. sale of their home) and that allows you to continue to market the property, or if you choose to accept a backup offer, ensure that you insert the correct language in your offer to protect you from selling it to two parties. Make certain that you (the seller) accept any subsequent offers with a written provision that your acceptance is conditional upon the collapse of the existing pending offer.

7. Don’t make it a race.

Have all parties agree on when to reconvene to consider the  buyer’s responses to the seller’s counteroffer. Turning a multiple-offer negotiation into a race doesn’t benefit the seller and it greatly increases the  likelihood that the transaction won’t close. Usually 18-24 hours is sufficient.

8. Ask for the Buyer’s best offer.

Advise the Buyer that the Seller will be making his final decision on the multiple offers at this second meeting. Ask the Buyer to bring back their best offer.  If you need to clean up some minor points, an  additional counter may be appropriate.

9. No verbal negotiations.

Always make sure that everything is done in writing. Sometimes in a single offer situation the Agents agree on the terms until they can physically meet to sign the documents, but this is only a trust condition between the Agents, is not legally binding and can be precarious. Furthermore, Agents should not sign on behalf of the  Seller except with prior written authority– always best to use one of the digital document signing services, scan and email it, or even fax it.

10. Proceed with caution.

If you have a counter-offer out and you receive a new offer that is better than the one on which you are negotiating, you have two options: rescind the current offer or wait until it expires. In some cases, a better course of action may be to allow the existing counter offer to expire and inform both Buyers that they are now in a competing offer situation, and to present their best offers.

When the market is ripe for multiple offers there are many (more than the above) tactics that a Seller can use to ensure that they extract the best price while ensuring their sale closes without further issue. There can be as many permutations of these situations that can arise as exist tactics, and by far the best strategy is to have the most experienced Agent on your side. In a heated market (that generates multiple offers) is where the real value of an experienced Agent proves out.  Call Sano Stante Real Estate Marketing and put over 31 years of expert knowledge and experience to work for you.

question-markWhat is the protocol for viewing listings that are not listed by my REALTOR®

This is the area where many well intended clients make an oops because they are “nice” and simply don’t know the protocol in the real estate world.

Here’s the scenario: You are driving around on a Sunday afternoon and see a home that just got listed (maybe the REALTOR® is putting the sign on the lawn). You stop and call the REALTOR®, enquiring about the home. Discovering that it’s the perfect home for your family, in the excitement of the moment you ask to view it. The REALTOR®says that he is two minutes away and so you view the home with the other REALTOR®. You may even decide to buy it on the spot signing an offer with that other nice REALTOR®who was so accommodating. Then you call the REALTOR®whom you’ve been working with for the past three months and announce with all the excitement of a new father that you found a home! You may hear a pause at the other end of the line while your REALTOR®recovers from the shock.

First let me say that this is not very common that it concludes this way, but many well intended buyers have called another REALTOR® to show them a property because they didn’t want to bother their REALTOR®. This simply has the effect of allowing the potential scenario described above or conversely wasting the time of the other REALTOR®after you tell them “Thanks, we love the property and will call our REALTOR®to write the offer”.

Best practice  is to select a REALTOR® that you are comfortable working with and know is looking after your best interest. Any service provider will work harder for you when they are certain that their efforts will ultimately be rewarded and your REALTOR® is no different relying that you will eventually buy a home through them.

Open Houses are an opportunity to view homes with or without your REALTOR® and there are no implied obligations when touring an open house. As a courtesy and to make your tour more comfortable, inform the hosting REALTOR® that you are working with “your” REALTOR®. They will appreciate knowing this because their job at an open house (besides selling the home) is to obtain new clients so this puts everyone at ease. If you wanted further updates on the home, they will contact your REALTOR®with the information for you.

Remember, that your REALTOR® knows your requirements best. If you see a new listing they are usually aware of it or are you best source to obtain the information fastest. Many times there will be some factor that precludes the property from being your best choice and your REALTOR® will inform you of that, saving both you and them valuable time.