Behind the Scenes of Competing Offers: What You Need to Know
It’s March, which means we’re heading into peak real estate season! Unfortunately for buyers – and fortunately for sellers – that sometimes means bidding war situations with competing offers. Inevitably, when we have a client facing multiple offers, they ask if the seller will counter their offer or if they will know what the other people are offering. We hate to be the bearer of bad news, but usually the answer to both questions is: NOPE.
If you’re a buyer, here’s what you need to know about why offering in a competitive situation with multiple offers is a bit tricker than a normal offer presentation.
PUT YOUR BEST FOOT FORWARD WHEN DEALING WITH COMPETING OFFERS
If you’re competing, that means the rules of the game change! In a normal scenario, you can come in a bit lower than where you’d like to end up and negotiate back and forth with the seller. With competing offers, your first offer should be your best offer.
In almost every multiple offer scenario, the sellers and the listing agent will review all of the offers presented to them and simply pick the best one.
Do.not.expect.a.counter! In some scenarios if two offers are very close, they may ask one buyer to clean up a small term or contingency. Plan to put your best foot forward to make sure you are even in competition. In other words, always proceed as if the seller will not counter your offer. You should feel satisfied at the end of the day that your best offer was made, even if you are not the winning offer so you aren’t stuck wondering… “what if”?
WHY THE HUSH HUSH?
ARE THERE OTHER OFFERS?
For starters, unless given consent by the client, the listing agent might not be able to share even IF there are other offers. In our area, the seller decides when they sign their listing agreement if the listing broker has the authority to disclose other offers on the property. If the seller hasn’t given that permission to the broker, then they can’t let us know there is a competing offer. The good news is it is the norm for this information to be disclosed. Typically, we will know before we write if we are the only offer, if there is one (or 21) we are competing against.
IF SO, HOW MANY?
Again, typically we will know exactly how many offers we are dealing with in terms of competition. But, sometimes the listing agent gets busy and doesn’t update all of the agents. We could think there are three offers but three more came in at the deadline! We always are on the offensive checking with the listing agent until the very last minute, so we almost always know the score here. But keep in mind that some agents won’t provide timely updates.
AND HOW GOOD ARE THEY?
Unfortunately, we very likely won’t know how good (or bad) the other offers are. The seller and listing agent have zero motivation to tell you what the other offer(s) look like – because they want you to beat it! We might hear tidbits from the agent that we can interpret. For example, “it’s a beatable offer” if it is low, or “we have two excellent offers in hand and are expecting two more,” which means it will likely escalate with contingencies waived. A good rule of thumb is that the more offers are on the property, the better the offers will be.
WHAT TO EXPECT IN A MULTIPLE OFFER SITUATION
Bottom line? Being in a situation with competing offers can be scary! Arm yourself with the necessary information, be patient and flexible, and always put your best foot forward by presenting your best and final offer.
Of course, enlist an experienced and trusted Realtor so you always have the best advice. Remember, not all sellers or listing agents are created equal. Our advice will be different in each situation, depending on how much information we have and how forthcoming the information is from the listing agent. Sometimes, the best offer might not win the day, but we will make sure you aren’t overpaying. You can read more about a client of ours in a similar situation here.
First time buyer? Download our First Time Buyers Guide here!
If we can help you find your next home, please contact us today! We would love to help you.
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