Multiple offers happen in even the toughest markets. In most cases they are typically driven by an attractive list price on a very desirable property usually newer on the market. As a seller it is the ideal scenario as it encourages buyers to make their initial offer as attractive as possible to avoid losing the property to another buyer. As a buyer it can be difficult as any room for negotiation is typically gone.
Although it sounds complicated to have multiple offers coming in on one property the process is relatively simple. When a realtor is working with a buyer that has interest in a property that agent typically calls the listing agent to advise them that their client is going to be submitting an offer on the property. At that point the buyer’s agent will ask the listing agent if he/she expects to be receiving any other offers on the property at or around the time his/her client’s offer is being presented. If the answer is ‘yes’ then a multiple offer situation exists. The buyer’s agent will ensure the client is aware that other offer(s) are coming in so the buyer understands the situation. It is the listing agent’s responsibility to notify all buyer’s agents that are writing competing offers on the property at or around the same time that a multiple offer situation exists to ensure a level playing field.
There is no limit on the amount of offers that can be presented however some offers will have a timeline as to when they must be responded to or they become null and void. In most multiple offer scenarios there are 2-4 offers being considered. The seller has the right to see all offers that come in before deciding which offer they are going to deal with. The term ‘deal with’ refers to accepting or countering an offer. The seller can accept or counter only one offer to avoid selling the property to more than one buyer. In most cases the seller will deal with the most attractive offer to them in terms of price, terms, possession date, inclusions and conditions. The seller’s agent will notify that buyer’s agent that they have either chosen to accept the deal as written which makes it the successful offer or that the seller has provided that particular buyer a counter proposal. Remember that only one offer can be countered by the seller. If the buyer agrees to the changes the seller has made via the counter offer this would now become a successful offer. In either case, after an offer was accepted the agents with the other competing offers would be notified that their offers were not successful.
The seller would have identified an order of desirability for the remaining unsuccessful offers and the buyer’s agents would be told what place their offer came in (2nd, 3rd, 4th, etc.). Starting with second place, the unsuccessful buyers would be asked if they would like to be placed in a backup position should something cause the accepted offer to become null and void. This provides the sellers with an alternative should the first deal collapse for some reason as well as the unsuccessful buyers with a chance at the property should the first deal fall apart. In most of these cases the unsuccessful buyers would also have to alter the price and terms of their initial proposal to be accepted as a back up offer.