Multiple Offers What you Need to Know!
Posted by David Parry on
The Victoria market area has really heated up in these past months. Properties are selling quickly and often above list price. In hot markets, it is common for many buyers to take interest in the same property. The result is multiple or competing offers written and presented to the seller.
Did you know a seller’s agent is only required to state the possibility of multiple offers? A buyer should ask their Realtor to inquire if the listing agent has other offers in hand. If yes, how many have they received? Their Realtor should ask this immediately before they present their offer.
Buyers should ask their Realtor if the listing agent is also representing a buyer with an offer. In the event that they are, they should ask if they have reduced their commissions as part of their deal. A listing agent must answer these questions.
In a competition, a buyer should make their best offer, their first offer. It’s unlikely that they will get a second chance. The offer should be as written few conditions as the buyer is comfortable with. Sellers will be more attracted to an offer that has few terms and conditions. This often means excluding conditions designed to mitigate risk, such as a building inspection or financing.
A seller has no obligation to consider, respond, or counter your offer. If their offer was not selected, a buyer should not expect a response other than “Sorry, you didn’t get the house.”
A full-price offer does not always guarantee a buyer will win a competition. The true value of a home is what someone is willing to pay. Many buyers will pay above the asking price to get the house that they want.
Sometimes the offers are so similar that a seller may reject them all and asks buyers to resubmit with their best consideration.
A buyer should accompany their Realtor during the presentation of their offer. Sometimes that means sitting in the car outside of the house while the seller decides. This way, a buyer can quickly make changes to a contract or review a counter-offer. There is never an opportunity to “sleep on it” in a competition.
Hot markets can be a frustrating, confusing and stressful time for Buyers. In a slower market, it is common to carefully research the condition of a home and bargain over the price. Buyers should have their financing in place prior to writing an offer. Often, a list agent will delay offers on a property for a few days in order to allow multiple potential buyers an opportunity to view. During this time, a serious buyer can often arrange for a building inspection. Unfortunately, with multiple offers the slow and steady approach to purchasing does not win the race.
We cannot prevent multiple offers, they are simply a natural part of a very hot market. Many buyers just choose not to take part in them. Regardless of your opinion, now you have an understanding of what to expect should you find yourself on either side of the table.