Tips for Handling Multiple Offers - Seller Advice

In sellers market where there is a lack of homes, too many buyers, and homes are selling quickly you may get multiple offers on your Wayne, Livingston, or Oakland County home.   But sometimes even in buyers market some sellers get multiple offers.  If your home is nice and priced right you may get more than one offer on your metro Detroit home. 

 

  

 So, what is the correct and ethical way for you to get the highest price possible.  Here is what we normally do:  We call for "highest and best".  What highest and best means is that each buyer has one last chance to present their best offer.  They may raise their price, the may pay cash, they may no do an appraisal.  Using this strategy, the seller does not counter any offer. Instead, the sellers agent calls the buyer's agents.  They are informed there multiple offers and are given a deadline by which they are asked to submit their best offer.   Then all offers will be looked at together.

 
If you are fortunate enough to receive multiple offers, make sure to review each one carefully. If one offer is significantly better because of less contingencies, or stronger financing, or one offer has fewer conditions you may want to try work with that buyer first. After reviewing the terms of the offers - and discussing them with your agent - you can submit a counter-offer to one of the parties.   But remember when you do a counter offer you have rejected their offer.   It is like there is no offer at all.  The buyer can walk away.

Multiple offers can be confusing.  And in the real estate business, confusion can be costly.   You do not want to lose all the buyers.  Compare all offers to offers.  The main areas to consider are:
A.) Net price - What you will walk away with from each offer.  What does the buyer want you to pay for? closing costs, home warranty
B.) Contingencies - Obviously is one is contingent on selling their home and the other offers do not have that contingency then that offer is not as good as the others.  They may never sell their home.  
C.) Conditions - What additional conditions do they want?  When do they want to move in?  Does it fit with your plans of moving? Do they want the stove and refrigerator?  That Affects net price also.  You will have to buy a new one.  Deduct that from the offer price.
D.) Financing.  Somebody that is putting 20% down with good credit is better than somebody looking for VA financing.  A buyer that puts down a sizable deposit or earnest money shows that they are really interested in the home.

The downside is that some buyers will not want to get into a bidding war and back out and, the upside is that the seller could receive an offer higher than the original listing price.   You may receive less contingencies, less conditions, and less requests for personal property.  That´s because the seller is not countering, they are just requesting the buyers best price and letting the buyer know they need to put a good offer together if they want the house.

The second Strategy is to pick one offer and negotiate it out

This simply means selecting one offer after comparing them and negotiating it to its eventual conclusion. The end result will be either an accepted offer resulting in a contract or failed negotiations. Should the negotiations fail, the seller moves on to negotiate with a buyer who has made another offer.  The problem with this strategy is that the other buyers may not wait around while your seller negotiates with only one offer.   

Multiple offers are exciting but can be confusing.  I have had clients get great highest and best offers when we asked for them.  So I recommend to do "highest and best" most of the time.  Hope this helps you!

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