Best Practices For a Listing With Multiple Offers

In today’s hot real estate market, it’s not uncommon to receive multiple offers on a listing. This can be great for listing agents who want a quick, profitable sale for their sellers. But it’s also frustrating for buyer’s agents who just want to help their buyers get under contract. 

Having multiple offers presents different challenges for the buyer’s agent and the listing agent. Here are several best practices for handling a listing with multiple offers from the buyer’s agent side and the listing agent side.

Best Practices for Fielding Multiple Offers as a Buyer’s Agent

Have you written multiple offers for your clients, only to keep getting them rejected by sellers? Here are some tips to help you win the contract in a seller’s market. 

Urge Buyers to Bring Their Highest and Best

Today’s buyers need to know that the only bargain they’re getting is the low interest rate that they can lock in for 30 years. Low-balling to “leave room for negotiation” is the fastest way to get your offer rejected. Be honest with your buyers: if they don’t offer their highest bid with the best terms upfront, they’re not going to get a home right now.

Offer More Money (and Maybe an Escalation Clause)

Increasing the purchase price is one of the best ways to get your offer accepted. You may need to go well over the asking price.

Including an escalation clause in the offer means that your buyers will automatically increase their purchase price if another offer is received. This can be written to cap at a certain amount or to continue matching each new offer price as received. 

Increase the Down Payment

Sellers love cash buyers because they know they won’t need to worry about financing falling through. The lower the down payment is, the more room there is for issues to come up. 

And the higher the down payment is, the more wiggle room you’ll have if the appraisal comes in under the purchase price.

Waive Contingencies (Carefully)

In a seller’s market, there’s no room for a home sale contingency. Your buyers will need to assume the responsibility for selling their existing home without making this purchase contingent on the sale.

You might decide to waive the appraisal contingency in a seller’s market as long as your buyers have enough cash to cover the difference between the amount the lender will loan (based on the appraisal) and the purchase price.

It’s generally not a good idea to waive the inspection or title contingencies. But if your buyers can schedule early dates for removing those contingencies, the sellers will feel better knowing that the house could be back on the market sooner if the deal were to fall apart. 

Have the Buyers Write an Introduction Letter (If Appropriate in Your Market)

Introducing your buyers to the seller by way of a letter could endear your sellers to the buyer and give your buyers an edge.

But be warned, these “love letters” or “cheese letters” are frowned upon in some markets because they could lead to sellers discriminating against buyers of protected classes.

Have Your Buyers Be Flexible

Could your buyers lease back the property to the sellers if they need a little more time to move? This kind of flexibility could make all the difference to certain sellers. This is happening more and more in today's market.

"We just accepted an offer with $110,000 additional down payment clause if the appraisal comes in low and a completely free two month’s rent-back option," said REALTOR® and real estate trainer, Rebecca Volden Del Pozo.

Best Practices for Fielding Multiple Offers as a Listing Agent

Listing agents are loving today’s fast market because they’re not struggling to promote listings, and they’re not seeing listings expire like they would in a more moderate environment. But there are still some best practices listing agents should abide by.

Set a Deadline

If you’re anticipating multiple offers, set a deadline in the listing details. Something like “sellers will be accepting offers through Tuesday the 19th at 5:00 p.m.” This will create a sense of urgency among buyers. And it will help your sellers make a decision rather than continually wait to see if any other offers come in. 

Disclose Other Offers to Competing Buyers 

If you have a reasonable offer, let other prospective buyers know. This will encourage those who are serious to make a favorable offer quickly. And it will encourage buyers who aren’t serious to move on because they won’t want to get involved in a bidding war.

While a bidding war can drive up the price, it can also lead to buyer’s remorse and could potentially kill the deal if the buyer feels like they were taken advantage of. For this reason, listing agents often disclose the fact that there are existing offers, but won’t disclose the price or terms of those offers. This is a judgment call to be made with the sellers. 

Present All Offers to the Seller

It is your fiduciary duty as a listing agent to present all offers to the seller. Even if one offer stands out as being objectively better than the others, it’s ultimately the seller’s decision. And sellers don’t always act logically.

Present all offers and give your sellers your professional opinion of each offer. Then step back and let them decide which to accept.

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