The Scoop on Competing Offers
In the current market, with the reduced amount of inventory, oftentimes a Buyer will end up being one of a few or several people that want to offer on the same home. When this occurs, a ‘Multiple Offer Competition’ will take place. This is the reason it is so important for a Buyer to have someone advising them, and representing their best interests. A Multiple Offer Competition can be complex and stressful, without proper guidance.
In a competing situation, typically each Buyer has their own Buyer Agent Representative working on their behalf, and the Seller has their Listing Agent acting for them, in their best interest.
Sometimes when it is an easy prediction of a potential Offer Competition, the Sellers’ agent will schedule the Competition ahead of time. They do this so that their Seller, has enough time for full listing exposure, so as to attract as many Buyers as possible. Although Buyers don’t like this situation, and would prefer to offer for the home immediately once they’ve seen it and have chosen it, the Sellers’ agent has an obligation to do what is best for their client, and advise them of what is in their best interest. And typically, more offers = more money $!
Some of the terms you may be hearing in the real estate marketplace, are ‘pre-emptive offers’, more commonly known as ‘bully offers’. This is when regardless of the Sellers’ listing instructions stating a specific offer presentation date, a Buyer’s agent prepares and registers their Buyers’ offer anyway. This is the Buyer Agent Representative fulfilling their duty to act in the best interest of their client. The Seller then has a choice to make as to what they want to do.
In most cases, a Sellers’ agent has their client sign an Offer Instruction form, clearly stating their wishes as to how they want offers handled. They have the choice to be open for any offers, anytime or with specific instructions regarding irrevocability (an offer term to be addressed in another Blog). Or they can choose a specific date to review any/all offers. They can also reserve the right to review pre-emptive offers, or clearly state that they will not be entertaining any pre-emptive offers until the Offer presentation date/time.
On Offer presentation day, nerves can often be frazzled and raw. I can’t stress enough how important it is to be working with an experienced Realtor that you trust, in this situation!
A Buyer will have their Realtor prepare their offer, after some in-depth market discussions. And under the advisement of their experienced agent, they will choose the terms of their offer, in hopes of winning their dream home, while not overpaying for it.
Once the Sellers’ agent receives all registered offers (again an offer term to be addressed in another Blog…stay tuned!), they will typically present each Offer to their Seller in order of registration. They will review all the terms & conditions with their Seller and discuss the pros & cons of each Offer, in order to decide how to proceed.
The Seller has the choice to: A) reject all offers; B) accept only one offer; C) counter back on one offer. They may also choose to give each Buyer the opportunity to improve or alter their Offer, before they decide to do anything. But I always advise my Buyers to never assume they will be given that opportunity, as the Seller is not under any obligation to do so. A Buyer should truly go in with their best offer the first time. I guide my Buyers very carefully, so they feel confident about their final decision.
Once the Seller has chosen the winning Offer, all agents will be advised, and there will only be ONE happy Buyer, and one or more very disappointed ones. But, as I’ve always told my clients… ‘when it’s the right home for you, it will come together!’
Please don’t hesitate to call, text or email me if you have any questions about Multiple Offer Competitions or any other real estate topic you’d like to discuss.
Guiding You Home, the RIGHT Way!
