Pick An Offer
In many of today's strong real estate
markets, home sellers can expect to receive multiple offers for their home.
Multiple offers are a classic example of economic realities because they appear
when the supply of homes for sale is limited and the demand for good-condition
homes is strong. Sellers love multiple offers because they push up home prices
and create an opportunity to spark a bidding war. Knowing how to respond to
multiple offers can help you get the best price and terms for the sale of your
How can I make sure my home will
attract multiple offers
Hit the market at the right price and, assuming
your home is in good condition, multiple offers should come in. "Sellers see
home prices are going higher, so they want to go a little higher. Sometimes it
works and sometimes it doesn't. You can end up having to wait for the market to
catch up with you," says Bob Stallings, broker/owner of RE/MAX Real Estate
Specialists in Long Beach, California.
TIP: Make sure your listing agreement
states that your agent will put your home in the Multiple Listing Service (MLS)
within 24 hours. Some agents will hold a home off the MLS for a day or two in
hopes of selling it themselves or in-house. Putting the home in the MLS as soon
as possible is in the seller's best interest because the home then will be
exposed to a much larger number of potential buyers.
Do I have
to accept the offer with the highest price
No. If you prefer a lower-priced offer, perhaps
with a better qualified buyer or more attractive terms, you can accept that
offer instead. Or you can give counteroffers to one or more of the buyers.
Caution: If you reject a full-priced offer, you may owe your agent a full
commission even if you don't sell your home.
Being greedy can back-fire. REALTOR Rae
Wayne of The Bizzy Blondes team with RE/MAX Westside Properties in Culver City,
California, says one seller instructed her to tell all the buyers' agents that
offers would not be considered until the property had been on the market for one
week, unless the offer was full-price or better. One agent asked to submit an
offer right away, but the sellers, who were hoping for multiple offers, insisted
on waiting until the appointed time. A week later, that agent was still the only
one ready to submit an offer. "The seller said to me, 'What if we plan a party
and nobody comes' I said, 'That's the risk you took when you didn't want to
look at this offer four days ago,'" she says. If you delay, anything can happen,
including the buyers losing interest or offering a lower price.
My agent says I should receive all my
offers by fax, rather than having the buyers' agents present the offers. Is that
size=2>Some agents recommend the fax-only option. "Very few agents who do a lot
of business will present offers anymore," says Carole Geronsin, a
Realtor-associate with Prudential California Realty in Anaheim Hills,
California. "Before, everyone would meet and the agents would tell all about
their buyers, then everyone would wait while the seller made a decision." If
there are multiple offers, the fax-only practice is a time-saver for you and the
agents. However, the jury is still out on this practice. "I wonder whether the
sellers are getting the full picture of the buyers, unless there are cover
letters telling them about the buyers' qualifications. It's hard to really
understand the offers and make a clear decision," says Stallings. "I'm a
strong believer that it's best for both sides to have the offers presented, so
the seller can ask the buyers' agents questions about the buyers."
TIP: You might want to receive all the
offers by fax, then have the top offers presented. Either way, you, as the
seller, make the rules.
One of the buyer's agents is from the
same brokerage company as my agent. Should I give extra consideration to this
No. All offers should be evaluated equally based
on the net price and terms. "We often have offers on our own listings and the
sellers don't pick ours. If my own offer is marginal and the other offer is
good, the last thing I want is for my seller to be mad at me. I'm going to look
for the best offer," says Judy Sheller, the other half of The Bizzy Blondes
TIP: Some brokerages give the seller a
commission break for an in-house transaction. This concession is known as a
"variable commission" or "listing broker advantage." It should be discussed in
advance and disclosed through the MLS.
Can I counter more than one
size=2>Yes. However, if you accidentally accept more than one offer you could be
legally obligated to sell your home to two buyers. For safety's sake, use a
standard counteroffer form that says the counteroffer isn't accepted until it is
signed by the buyer and subsequently accepted by you.
Can I back out of my escrow with
buyer A and accept a new higher offer from buyer B that my agent just
size=2>Trying to back out of an escrow is extremely unwise because an accepted
purchase offer is a legal contract and the buyer can take action to enforce it.
"Legally, once you have signed and agreed to the offer with buyer A, you can't
get out of it. Your only hope would be that the buyer does an inspection and
makes a bunch of requests. You flatly refuse everything and perhaps the buyer
walks away," says Wayne.
My home has been on the market for
four weeks, but I haven't received any offers. Is this situation my agent's
you ignored your agent's advice about pricing your home or making any repairs,
it's not really reasonable to blame the agent for the dearth of offers. However,
if the home is priced right and in good condition, you'll want to have a frank
conversation with your agent and take corrective action. Never sign a listing
agreement with a term of more than three months. As a last resort, you can ask
your agent's sales manager to help resolve any complaints.