Perhaps no situation is more frustrating for a buyer than finding themselves in a multiple offer situation. In today’s real estate market, it’s not uncommon for buyers to have to fight off stiff competition to get the house they want. Having competing offers on the same property can be extremely stressful. Here are some tips and tricks you can utilize to give your offer a fighting chance to buy a house from someone who is trying to sell a house.
What Is a Multiple Offer Situation?
A multiple offer situation occurs when more than one offer is placed on a property simultaneously. This is more likely to happen in a “seller’s market” when there is greater competition between buyers. In some situations, sellers may have several competing purchase offers to consider. The offer that gets accepted is highly dependent on the sellers and the terms they want. This may not always be the highest offer.
Multiple Offer Situation — What Buyers Need To Know
Multiple offer situations can differ significantly between sellers and markets. When entering a multiple offer situation, your buyer’s agent will be able to advise you and represent your best interests. In many states, the listing agent is not able to give potential buyers specific information about the other offers on the table. This means that multiple offer situations are often fraught with uncertainty.
There are various advantages and disadvantages to multiple offer negotiation strategies. Although buyers are often tempted to go in with a lower offer, this isn’t typically recommended in a multiple offer situation. In fact, when faced with opposition from other buyers, it’s crucial that you put your best foot forward. A low initial offer is likely to result in another buyer’s higher offer being accepted. This is especially true if the sellers request the buyer’s “highest and best offer.” The term “highest” referring to the sales price, and “best” referring to the terms. Typically in this situation, each buyer will be asked to present their highest and best offer by a specific time. This helps the seller to consider all offers before making a decision.
Negotiating A Multiple Offer Situation
Similarly, your contract terms can be just as crucial as your sales price. For instance, if you’re able to close quickly, or your offer is cash, sellers are more likely to choose it. This is true even if it is the same offer, but simply has a longer closing date. Of course this can vary between sellers. For example, some sellers may prefer an extended closing date to give them time to move. Your buyer’s agent can explain to you the pros and cons of entering a multiple offer situation. In addition, they can explain the best strategy for success.
Some buyers opt to make their offer confidential or establish a confidentiality agreement between themselves and the seller before commencing negotiations. Although not strictly necessary, this may help you feel more confident about your offer. It’s important to note that your buyer’s agent will advise you based on their past experience and the current real estate market in Ohio or Arizona. As each deal is highly individual, the advice given cannot predict how any particular seller will act (or react) in a specific deal. It’s crucial that you carefully weigh up your options if you find yourself in a multiple offer situation. Clearly setting your budget beforehand can help you stay calm and ensure that you don’t offer more than you can afford.