As the current real estate market conditions are so competitive, it is no surprise that deals involve multiple offers from multiple potential buyers. As a real estate agent, handling and responding to these competing offers can be tricky. This is why understanding how to best navigate multiple offers is essential for your success in this business.
Continue to read to find out several tips for dealing with multiple offers in real estate.
Handing Multiple Offers as a Buyer's Real Estate Agent
If you are a real estate agent in a market that is known for multiple offers, it is important to prepare buyers for this possibility.
Here are some tips to give buyers so they are ready to compete in a competitive market:
- Get pre-approved for your home loan.
- Know that offering the asking price might not be enough.
- Be ready to move quickly and make fast decisions.
- Decide what contingencies are a must and what can be done without.
- Price is not the only consideration, as a seller will also look at closing dates, contingency clauses, and financing.
- You might have to make several offers before one is finally accepted.
- Avoid low-ball offers in hot markets.
Pam Pester of Mobiliti CRE - Tampa Commercial Realtor had this to say about educating your clients:
"If you have educated your clients about competing in a hot market, and they are ready to make their first offer for a property that will have multiple offers, advise your buyer that the seller has several options when receiving numerous offers."
- The seller can accept the "best" offer.
- The seller may inform all potential buyers that other offers are on the table.
- A seller might disclose details about other offers to potential buyers.
- The seller can counter one offer and wait to hear back from this buyer before communicating with the other buyers.
- The seller can reject all of the offers.
Remind your buyer that there are no guarantees in real estate. You might guess what a buyer will do based on your past experiences, however, sellers sometimes follow unexpected patterns.
Handling Multiple Offers as a Seller's Real Estate Agent
As a seller's agent, it makes sense to want multiple offers to present to your client. Some agents encourage sellers to set a deadline for offers to allow multiple parties to make an offer.
Here are tips to share with sellers facing multiple offers:
- A house might not be worth the money being offered, meaning the appraisal could come in low, and the lender might not finance the amount the buyer requested.
- Cash offers are preferred because there is no need to worry about a buyer getting a mortgage or the home appraising for less than what is offered.
- Some offers will come with an appraisal gap guarantee clause, which means the buyer will cover a gap between the agreed-upon sale price and the appraised value.
- A lower offer might be considered if the buyer doesn't ask for an inspection contingency, meaning there won't be surprising repair bills.
- Take an offer that best suits your goals, regardless of price.
The Bottom Line
When engaging in a competitive real estate market, it is important to not drag out responding offers in an attempt to get more. Bad offers shouldn't be used to get more from another buyer, even if someone offers well over the asking price, that doesn't mean they can make that offer happen. Let professionals at Coastal Realty Group guide you in finding your dream home in the many beautiful oceanfront communities on the Forgotten Coast of Florida today!
