Tips for Managing Multiple Offers
Despite any changes in the market, multiple offer situations still happening in some cases for certain properties. While at first this may seem like an ideal outcome, you will need to look at every offer to see how good it is all around, not just the offer price. For example does the buyer have contingencies of selling their home or can they close when you want to? Once you review all, you then have 4 options and they are as follows:
Accept the offer you feel is best
Conduct a bidding war and shop the best offer individually to see if they will beat it
Offer a “best and final”
Counteroffer the offer you feel is best
Here are the positives and negatives for each situation to help you choose which option is best for you.
1) Accept the offer you feel is best
If time is of the essence and the best offer meets all of your needs, you may want to accept this one.
Pros: This saves time and undue stress
Cons: You don’t always know that this was the “best” offer. There may be a surprise down the road with something like home inspections, financing or otherwise. Also, accepting this offer may prevent you from getting even more money for the home that you could get.
2) Begin a bidding war
Per the ethical guidelines proposed by the National Association of Realtors, offers don’t necessarily need to be kept confidential. As long as the real estate agent and the seller are in agreement on this, offer details can be shared.
Pros: You have the power to rule the situation.
Cons: Some buyers may be scared off with this approach and if anyone declines to further negotiate, it may cost you an offer.
3) Go to Best and Final
This option will let all interested parties know that there are competing offers as you encourage all to put forth their “best and final” offer.
Pros: This saves time as you work with everyone simultaneously and squeeze more money from them.
Cons: Like a bidding war, some buyers won’t want to play this game and remove themselves from the situation.
4) Counter the best offer
Sometimes one offer is by far the best one by many accounts and in this case you may want to work with them while you keep the others simmering.
Pros: This can be a good option by letting the buyer know their offer was chosen and you are working with them to perfect it, but you do have backup offers on the back burner.
Cons: While there isn’t much risk in this scenario, the other buyers will have only so much waiting time before they withdraw or make offers on other properties.
