Preparing a Good Offer
Even the most experienced listing agents have to carefully navigate their way through a multiple offer situation. It can be tricky! They can offer guidance, suggestions and advice, but the decision about what offer will be accepted is ultimately made by the seller.
When sellers have several competing purchase offers to consider, they can accept the “best” offer; they can have their agent inform all buyers that there are other offers “on the table” and call for highest and best; or they can counter one offer while putting the others to the side waiting on the response from that offer, or they can counter one offer and reject the others. It is not a bidding war as some may want to refer to it, but rather, its buyers demand for a good property at a good price.
There are different negotiation strategies you can use when confronted with multiple offers on a property. On a priced right desirable property, there can be several full price offers competing for the seller’s acceptance. Prior to preparing an offer, a buyer’s agent should ask the listing agent if there have been any offers made previously on the property and if so, why weren’t they accepted by the seller. What kind of showing activity are they having? Knowing this information will help you write a stronger offer. A good listing agent will advise the buyer’s agent that there are other offers “coming in” or “on the table”. Take note! “Coming in” or “on the table” are two very different things. I’ve been called by panicked agents asking “what do I do?” Saying they expect multiple offers based on what other agents had told them and guess what? Nothing shows up!
Once you have submitted an offer and the listing agent calls for highest and best, explain to the buyer that if they really want this property, it is time to do just that! Time is of the essence at this point. Too often a counter offer is “on the table” going back and forth and then BAM! Another offer comes in at a higher and better price and the first buyer loses the property.
This is a crazy environment we’re in right now – I believe that buyers are in control of the market and we see multiple offers coming in every week on properties. Why? Good agents and their buyers are doing their homework and they know a priced right property when they see one. Shop those recently reduced properties and those that have been on the market awhile. Whether you are dealing with multiple offers or not, here are a few suggestions to make your offers more desirable: Make a substantial earnest money deposit to show the seller this buyer is serious. Provide a pre-approval letter from the lender with the offer. If the sellers are purchasing another home, give them time to move by offering two or three days after closing without any compensation to the buyer. Shorten or waive some contingencies. For example, lessen the amount of inspection days from 15 to 10. Write the best offer the first time, knowing that the seller may still counter but the seller also knows that there are a lot of properties to choose from.
There are no set rules when dealing with multiple offers. Terms and conditions of the offers may not be disclosed and as always, all parties need to be treated honestly and fairly.
Written By: Kathy Zorn