Multiple offers, something many seller’s 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, but 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 for highest and BEST, not just the highest price? One of the most common mistakes I’ve seen home buyer’s make in a multiple offer situation is increasing their price, but not changing any of the other terms like; escrow deposit, types of contingencies, contingency periods or closing date. Home buyer’s 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 seller’s will request highest and best, some prefer to counter one offer at a time. A few years ago I presented multiple offers to a seller and all of the purchase prices were within range of one another, 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 counter offer. Had the seller requested highest and best the cash buyer may have never changed any of their terms or they may have lost them altogether. While it’s rare, not all buyer’s 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), request highest and best or even 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 our current real estate market it’s not uncommon for home buyer’s to submit their highest and best offer from the start because they don’t want to lose the home. 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 that just hit the market they feel in love. They didn’t want to lose the house, so they submitted their highest and best offer hoping the seller wouldn’t want to look at or wait for other offers and it worked.
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 our expertise to work for you and let us walk you through the entire buying process, from start to finish.
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— Michelle Gibson (@WellingtonHomez) October 25, 2017
Additional Home Buying Resources
Below are additional articles about multiple offers written by leading real estate professionals from around the country.
7 Tips to Help a Home Buyer Win in a Multiple Offer Situation by Kyle Hiscock
How to Handle Multiple Offers and Bidding Wars on My Home by Bill Gassett
How a Seller Handles Multiple Offers by Sharon Paxson
4 Reasons for a Home Buyer Consultation by Maria Mastrolonardo