A Seller’s Guide to Multiple Offers

There’s a lot coming your way once you’ve listed your property on the real estate market. You have to plan your move, coordinate showings, sift through offers, and still find time to live your life. If you’ve received multiple offers for your home (congrats!) you’re probably feeling overwhelmed and a little confused. Before setting anything in stone, read our breakdown of the multiple-offer scenario so you can have a better understanding of the situation and feel confident about your decision.

What conditions cause a seller’s market?

When there is more demand for homes than there is property available to meet that demand, we experience a “seller’s market”. This means homes are usually selling quickly and buyers are paying over-asking for them. Ideal for sellers, this means you can be highly selective when considering offers, and you’re more likely to get a great return (so it’s smart to take advantage of these market conditions). 

Different factors can influence the market, and in 2020 we saw an exponential rise in consumer demand for homes because of the government-issued stay-at-home orders and mass transition to work-from-home jobs that meant people were in need of larger, more functional properties.

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How should you navigate a multiple-offer scenario?

A multiple-offer situation happens when you receive more than one bid for your property. Because of the lack of real estate inventory available in a seller’s market, it’s likely that you’ll find yourself in a multiple-offer scenario if you list your home in these conditions. 

While it’s good to have options, you want to ensure you choose the best overall offer, because it’s not always as simple as accepting the highest price. Other factors that can determine the value of an offer include:

• Financial conditions: make sure the offer comes with a mortgage pre-approval from the buyer, as buyers who present offers without this included are less likely to follow through with the deal
• Cash offers: these eliminate many steps, allowing the sale to close much faster. Because of the high convenience, a cash offer may be more beneficial to you than a higher offer that’s contingent on a mortgage loan
• Other conditions: some buyers may include specific requests in their offer such as a home inspection or a home sale contingency (meaning their offer to purchase your property depends upon the sale of their current home)

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There are different ways you can approach a multiple-offer scenario depending on your particular situation. You can:

• Simply accept the best offer you receive
• Inform all buyers that you’ve received multiple offers, and invite them to resubmit their best offer
• Make a counteroffer for the most appealing offer

Your agent will help you decide the best strategy for getting the best possible value for your home while protecting your best interests. 

What to do if you receive a bully offer

A bully offer is one that’s submitted to the seller prior to the offer date the seller established. The buyer’s objective in this situation is to convince you to accept their offer without looking at any others. They’ll typically include a deadline by which you need to accept the offer before it’s retracted, and that’s usually before your offer date. 

Pro:

• Bully offers are usually impressive, including an offer price that’s significantly higher than your listing price (otherwise, it wouldn’t be much of a strategy)

Con:

• Because the buyer is trying to force you into choosing their offer, it may have conditions or terms that aren’t in your best interest

While a bully offer can feel intimidating, you’re actually in a great position! It just means that you have more options. Making the right choice is where your agent comes in. They’ll help you analyze the situation, understand the potential outcomes of each option, and share current market stats to help you see whether it’s likely you’ll get a similar or better offer by your original offer date.

Your agent can also tell you whether or not it’s worthwhile to present a counter-offer to this exceptionally motivated buyer. 

When you’re faced with a multiple-offer scenario, remember, that’s a good thing! To make the right decision that you’ll be happy with years down the road, you need the guidance of a trustworthy agent who’s been in these exact situations and can guide you with relevant expertise, real market data, and practical experience.

Get the support of 37+ years in the business when you partner with the Lino Arci Team to list your home. Find an agent here.