Multiple offers and sellers, what would be the best approach? You have multiple offers; buyers are lined up interested in your property. Things are going your way, and you like to keep them that way. To get here, you and the listing agent have made the right decisions; correct pricing, staging, and perhaps market favours the sellers as well. The listing agent is excited since he/she will have a sold sign on the lawn soon.
Experienced real estate agents will tell you that all the happy thoughts can turn into an unfriendly situation. One can feel the greed, excitement, anxiety, and tension. If not checked, it can turn the situation around very quickly. Experience real estate agents usually navigate, making their clients' best interest is served, and everyone is treated fairly.
Here is an essential point regarding the listing agent's duties, according to the code of ethics. The listing agent must convey all the offers to the seller, albeit the offer is written or verbal. In other words, every offer, either low, written, and verbal, should be delivered to the seller; it is solely at the seller's discretion to make the decision.
Real Estate Council of Ontario (RECO) wording on this issue:
"The law is clear: as a registrant, you must convey an offer to your client as soon as possible. An exception arises if your client has given clear, detailed, and express written direction to do otherwise."
There are rare occasions when the seller does not plan for multiple offers; surprisingly, several offers are presented. However, most times, the listing price is below the market value by about 10% to draw the necessary attention. A date is set aside, usually two weeks after the listing date, for the seller to entertain the offers.
Multiple offers may come around the same time, usually closer to the date set aside. It is also possible to get another offer while in the middle of negotiations.
Once you as the seller get to see all the offers; The buyer's agents are informed of the multiple offers and asked them to come back with the best and final offer. At this point, buyers will decide to improve their offer (increase the price, remove contingencies) or stick to the original offer. Given the buyers, a second chance to come back with the best and final offer works for the seller's best interest.
As a marketing strategy, the seller can have an inspection done beforehand and available for the buyers to see. Some buyers are not comfortable removing the inspection clause and may avoid presenting an offer. Having an inspection ready for the buyers may increase the number of requests coming in. Besides, buyers will be encouraged with the news that that house has no issue; hence they may consider presenting a better offer.
The seller may decide to disclose the price and terms of the offers to one or more of the buyers. However, we strongly suggest the seller consult the listing agent. Although the seller has that option, terms should only be disclosed if it works for the seller's best interest.
What are pre-emptive offers (also referred to as bully offers)? Some buyers may present their offers (referred to as pre-emptive offers) before the offer presentation date; these offers expire before the date of offer presentations. The seller may instruct the listing agent to avoid accepting any pre-emptive offer; in that case, the listing will have clear instructions informing the potential. Otherwise, the seller may instruct the listing agent to see the pre-emptive offers and decide to consider the offers or wait until the offer presentation date.
What are the disadvantages of a delayed offer presentation scenario? Some buyers are not comfortable with the bidding war; thus, you may lose out on a potential offer. New listings appear every day; while you are waiting for the offer presentation date, some buyers may discover an alternative property. It is also possible that the offer date passes, and no offer was submitted, or none was acceptable. At this point, the property has been on the market for a few weeks; it may be lee appealing to the buyers.
In summary, having an experienced real estate agent is vital for the process. Many elements can go wrong, and the stack is high. The choice of the highest bid may not work well if the buyer could not close the deal for financial reasons or any other. It would be best to look at the offer as a whole, contingencies, closing time, amount of deposit, and buyers' financial background. You should take advantage of the multiple interests in your home; however, be fair and courteous.
The above Real Estate article was provided by David Khosravi, a leader in his field in Willowdale, North York, Toronto. Reach out to David via email: firstname.lastname@example.org or by phone: 416.990.2424