What Happens if a Home Seller Receives Multiple Offers?
Multiple offers are something many sellers hope for, but every buyer dreads. So what happens if a seller receives multiple offers? It all depends on how the seller would like to handle the situation. Here are the 3 most common ways multiple offer situations are handled.
Highest and Best
Some sellers will request “highest and best,” which means every buyer who submitted an offer has the opportunity to resubmit their highest and best offer by a certain day and time. Notice the seller is requesting the highest and BEST offer, not just the highest price?
One of the most common mistakes buyers make in a multiple offer situation is only increasing their price. But not changing any of the other terms like; escrow deposit, types of contingencies, contingency periods, or closing date. Homebuyers should never expect a full-price offer to win in a multiple offer situation because there is more to an offer than price.
Counter One Offer
In my experience, not all sellers will give every buyer an opportunity to submit their highest and best offer. Some prefer to counter one offer at a time, usually, the one they feel has the most potential.
A few years ago I presented multiple offers to a seller. All of the purchase prices were roughly the same, but the secondary terms were night and day. This particular seller decided to counter the only cash offer they had on the table and the cash buyer accepted their counteroffer immediately.
Had the seller requested the highest and best offers from all parties the cash buyer may have never changed their offer or the seller may have lost them altogether. While it’s rare, not all buyers want to be involved in a “bidding war” and may walk away.
Accept an Offer
Just because a seller receives multiple offers does not mean they are required to counter an offer(s). They don’t need to request highest and best offers from every buyer nor do they need to disclose they have multiple offers in hand. Some sellers will accept one of the offers as written because it’s the terms they want.
In a hot real estate market it’s not uncommon for some buyers to submit their highest and best offer from the start. They do this for a couple of reasons. One, they don’t want to risk losing the home to another buyer. Two, they want to show the seller they are serious, so they put their best foot forward by presenting their highest and best offer from the start.
A buyer I recently worked with was in this position. They saw a lot of homes and liked some of them, but when they viewed a new listing they fell in love. Not wanting to lose the house they submitted their highest and best offer. They were hoping the seller wouldn’t want to look at or wait for other offers and it worked.
Final Thoughts
In a competitive real estate market a home buyer should never assume a seller will accept or counter their offer especially if they received multiple offers, they may just reject it. If you need assistance with purchasing a home put my expertise to work for you and let me walk you through the entire buying process, from start to finish.
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Multiple offers, something many seller's hope for, but every buyer dreads. So what happens if a seller receives multiple offers? Find out now! #realestate #homesellingAdditional Real Estate Advice
- How to Help a Home Buyer Win in a Multiple Offer Situation – Kyle Hiscock provides 7 tips to help buyers win when they’re in a multiple offer situation.
- How to Handle a Bidding Wars on My Home – Bill Gassett shares with sellers the different ways they can handle multiple offers on their homes.
About the Author
Top Wellington Realtor, Michelle Gibson, wrote: “What Happens if a Home Seller Receives Multiple Offers?”
Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell, or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.
Areas of service include Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.
Michelle Gibson of the Hansen Real Estate Group Inc is a full-time REALTOR who has been specializing in Wellington Florida real estate since 2001. This veteran of the real estate industry has expertise in technology, marketing, and social media.
Very good article that brought up good points. Here in Gilbert Arizona this last summer this market was brutal, representing a highly qualified buyers. It was common to have 5-14 offers within hours or the first couple of days. In some cases the sellers sat on the offers or specified in advance offers would be collected for a set period of time before they would be reviewed, so they could collect as many offers as possible.
Your point to not solely focus on the sales price and sweeten the terms of your offer in other ways is wise advice.
A seller has three major concerns: 1) is the buyer qualified and committed to closing escrow on time, 2.) will the property appraise or will I have to renegotiate the price and 3.) what is the buyer’s home inspector going to find and how much will it cost to make repairs.
You learn at close of escrow how committed the buyer is. But a letter from the buyer stating why they are making their offer and their commitment to fulfilling the contract could help reduce seller anxiety about the closing.
The comparable sales should tell the seller what the appraised value should come in at… or very close to it. Offering to waive the appraisal contingency will alleviate the seller’s concern about the appraisal.
The last concern about cost of repairs could have been determined with a seller home inspection prior to the home being listed for sale. The buyer could offer to pay the first $500-$1000 of repairs required as a result of the home inspection findings.