In a seller’s market, multiple offers are not
uncommon. But what does that really mean?
And how should you and your agent
work together to generate the most interest in a multiple offer situation? Find
out more in my post…
When inventory is tight and a market heats up, sellers often dream
of finding themselves in a multiple offer situation. In a multiple offer
situation, more than one potential buyer submits a written offer on the home.
With multiple offers on a property, the listing agent can then try and “shop
the top offer” in order to try and get the best deal possible for their client.
If you live in a hot market, how do you structure your listing in
such a way that you get the best possible offers in a multiple offer situation?
One strategy for cultivating multiple offers is letting buyers
know that the seller will only entertain offers on a certain date. Rather than
deal with offers dribbling in one at a time, there’s a deadline for offers.
When this happens, buyers know they have to have a truly exceptional offer on
the table if they hope to be in the running for the property.
With a deadline on offers, buyers will look at ways to gain an
advantage over other offers. This often extends beyond pricing, though pricing
is a part of the picture. “Escalation clauses” are frequently built in should a
buyer’s offer find stiff competition from another buyer. The clause ups the
amount the buyer is willing to pay in the face of a legitimate competing offer.
In addition to escalation clauses, buyers may also waive other
terms and contingencies relating to inspections, title, or financing. In some
multiple offer situations, an all-cash buyer will have a considerable advantage
over those who must still navigate the additional complications of their
financing.
Be aware that in a multiple offer situation your agent may not be
eager to try and instigate the next level: An all out bidding war. While the
agent has an obligation to secure the best possible offer for your listing,
bidding wars can generate a lot of bad blood between agents who have worked
together the past (and hope to work together in the future). Some sellers will
push an agent the direction of a bidding war, but those who do must realize
there’s an inherent risk in making an enemy out of buyers and buyers’ agents.
(Everyone has their limits!)
Do you live in a market that’s hot? How in demand would your home
be if it happened to be on the market right now? Have you talked to an agent
about the prospect of generating multiple offers on your property?
Contact me and I can help answer all of these questions and more: valerie@valeriemcconvlle.com
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