The past few weeks have been busy. More multiple offer deals. So far this year I’ve sold 13 houses. Of those transactions, 9 of them have been multiple offer situations. In some cases I represented the sellers. In others, the buyers. The houses have been priced anywhere from the mid-$200Ks to the mid-$500Ks.
Whenever I let my buyer clients know that another offer has been submitted on the property that they’re interested in, the first question they always ask is “How much is the other offer?” or “What did the other people offer?”
Unfortunately, as the buyer’s agent, I never know. The seller’s agent will not disclose terms of the other offers that have been presented. In most cases, the agent will come back and say that their seller client has asked the interested parties to submit their highest and best offers.
As a buyer in this situation, there are three things you can do; drop out, hold firm on your original offer, or improve your offer in some way. Your actions are driven by your motivation related to that specific property and your personality.
Some buyers do not ever want to be in a multiple offer situation, as they feel they lose too much negotiating power. Others are okay with continuing, but set firm boundaries that they are not willing to go over, realizing that they may not get the property. And there are some buyers that are so enamored with a home that they’ll do whatever they can to “win.” This latter scenario is less common in today’s market. We are seeing that people are still willing to participate in multiple offer situations, they are just being more cautious than they were in the past.
One common myth about multiple offers is that people always pay over asking price. That is not necessarily true in today’s market. Your agent will advise you on specifics related to the property you’re considering. How long has it been on the market? Is the current price supported by comparable homes that have recently sold and that are currently for sale? Was there recently a price reduction that would drum up a lot of interest? What’s the condition of the home? How many other properties are in the same price range and how do they show in comparison? Based on this information, you should have some idea if the home is priced correctly, or if it’s under or overpriced. This should help you adjust your offer to what’s comfortable for you and your situation.
Just remember, there will always be another property that will come along that will meet your needs. If you choose not to participate in a multiple offer situation or find that your offer isn’t selected by the seller, you may have to wait a bit, but there will be other options.