Multiple Offers

Multiple offer situations are tricky at best, and often times can be complicated. As agents, we are required to protect and promote the interest of our clients by maintaining fidelity to their interest, while handling all parties in a fair and equitable manner. The key factor here is maintaining control while exercising knowledge: a bit of wisdom and plenty of patience, all combined with superior negotiating skills. Sounds like a lot? It is. Plus, remember that one of the parties will be unhappy no matter how well you conduct the situation, as only one buyer can have the property. Explain the alternatives and options, but ultimately let your clients be the decision-makers. You need to remain neutral.

To help alleviate complications later, structuring the process should begin at the listing presentation if you represent the seller, or at the initial buyer interview when servicing a buyer. A few informative steps will help the process run a little smoother.

Step One

The listing presentation is perhaps the best time to address how you as their listing agent prefer to present any offer, including multiple offers. This is your opportunity to set the stage for how a professional agent handles the contract presentation. Let your seller know that offers will be presented in your office when possible. An office is a more neutral environment and is generally equipped with copiers, fax machines, scanners, conference calling and conference rooms.

Office presentations ensure that separate conference rooms and private phones are available to all parties. This not only takes the seller out of their personal territory and into a less emotional one, but it saves you precious time as well.

Step Two

Be ready! As the listing agent, you will notice that sellers get real excited at the thought of buyers lined up with checks to buy their home. This is a good time to review the options a seller has when confronted with a multiple offer situation. Although it is a great position for the homeowner, explain why the presentation procedure must be handled carefully to avoid losing one of the bidding parties before the negotiation even begins. In some cases, one of the buyers may choose to walk away from the offer to avoid a bidding war, where they’ll end up paying top dollar, in some cases even more than list price, for a property.

As the listing broker, you and your seller will want to examine both offers to determinewhich one best fills all the needs of the seller and who is the better qualified buyer to purchase the home. You may find that your seller is a little confused when one of the contracts offers a higher purchase price, but may be less desirable with other facets of the agreement. Here are a few ideas for help in clarifying things:

Have a simple synopsis sheet that reviews and compares both offers. This helps the seller focus on all the important issues of the agreement…not just the purchasing price. This is the perfect place to make clear what personal property is actually included, or excluded and define particulars about financing. Additional items like charges for points and specifics regarding possession or payment of special assessments are clarified, so all points are clearly understood. In the excitement of activity, sometimes the purchase price becomes the main point, when the actual support information can be the deciding factor.

As the agent for the buyer, have all your support documentation clear, concise and available. Besides having the contract legible and fully completed, make sure all addenda are attached to contract. Include a pre-qualification letter from the lender for the buyer. Attach other pertinent information to support the credibility of your buyer. Information to strengthen the position of your buyer may include relocation information, corporate buy out verification or special financing assistance offered through a corporate bonus program. All these will make the position of your buyer stronger. It may be a good idea to include personal information like family data, ages of children and job history. This information will help the seller arrive at a decision with which they are comfortable.

Step Three

Keep an accurate account of dates, times, calls and all information pertaining to the notification of offers. Unfortunately, our lives in real estate are not always orderly and in perfect sequence. Often we are driving around with one customer when we find out an offer is waiting at the office. Try to keep an accurate account of the actual receipt of each offer, with an account of times and dates for all correspondence and counters that have to deal with your offers to purchases.

Step Four

Be certain that the seller understands the countering process. Many sellers get a bit heady and want to counter both offers at full price. Inform the seller that if both parties accepted the counters, he might have sold the home to two parties. That invites the possibility of lawsuits for specific performance, as well as two commissions instead of one. Working with one offer at a time retains control, keeps clarity and can result in a win-win situation for all parties involved.

Step Five

Always take an opportunity to be gracious and say thank you to the agents involved in your offer. Remember the agents you are working with will be around longer and with other buyers than this seller. Taking the time to drop a quick thank you note keeps the professionalism up with a personal touch.

We all want our properties to sell and lots of buyers want our listings. Remember to follow these few easy steps when handling multiple offers: stay within the law, abide by the code of ethics, follow your clients instructions, treat all parties fairly, practice integrity selling and then, mark that property sold.