Multiple offers are becoming the new norm for many hot areas in our market. A year ago I saw the trend only in certain cities such as Acworth and Kennesaw, and that was if the home was in good shape and priced right. Now I did have homes in other areas that if priced right would have multiple offers, but not as often as what I saw in other cities. Just this past weekend though I listed a home in Hiram and within 2 days we had multiple offers, it was crazy but exciting for the seller! What do multiple offers mean to you? Well, that depends on if you are a buyer or seller.
Multiple Offers as a Seller
This is good news! You are in a great position. In this position you have the bargaining power over the buyers interested in your home. You can do a couple of things. Maybe there is an amazing all cash no contingency offer on the table, you could accept it! You can choose one offer to counter, or you can ask your agent to notify all interested parties that there are multiple offers and call for highest and best. This can get tricky though. My seller for the multiple offer situation I mentioned earlier decided to accept one of the offers instead of calling for highest and best. In this case all the buyers had presented their highest and best offers up front, sometimes though buyers may insist offering lower than asking price AND ask for closing cost. If you have multiple offers on your home that are less than what your list price is for, call for highest and best. Be careful though sometimes accepting an offer way above list price could result in appraisal issues down the road.
As a seller the first thing you should look at is what you are going to net. What is sales price? How much do they want in closing cost? Any contingencies? Special stipulations? What kind of financing? There are certain loans that are more attractable than others. Your agent should be able to advise you on the pros and cons of each offer.
Last year a buyer of mine made an offer on a home that another couple made an offer on. The seller called for highest and best. My buyer’s offer was not chosen and we continued to search for another home. A few weeks later I received a call from the listing agent that the other contract fell thru and wanted to know if my client would be interested in making an offer. This time around since there were no other offers we offered less. The seller accepted and in the end he had lost out on a couple thousand dollars by not accepting our highest and best initially. At the time of calling for highest and best the seller went with an offer that he was going to be netting more but it was not the best financing option. This particular loan is a tough one to work with. If I was the sellers agent I would have advised that he counter the better financing offer to match the amount he was going to net with the other offer.
Multiple Offers as a Buyer
This particular situation worked out great for my buyer, but in many cases as a buyer it doesn’t. As a buyer multiple offers is a dreaded word. It means you are now competing with other people for a home. One way to avoid a multiple offer situation is once you find a home you like and want, act quickly to make an offer. The longer you wait the more time another buyer has to see it and potentially get an offer in. Also, in this market unless a seller’s home is way over priced you can’t send over low ball offers…some sellers wont’ even counter your offer if it’s too low. There are some ways to make your offer stronger even if you don't have the ability to increase purchase price, you can ask for less money towards closing cost. Offer more money as earnest money. Turn that 10 day due diligence into a 5 day. To recap when you find a home you like, act quickly to get your offer in and start off with a strong offer, if highest and best does get called get creative with your offer! Your agent should be able to advise if you this is a home that will go quickly.
If the seller ends up calling for highest and best, that’s ok! If you win the bid great! If not, maybe the home wasn’t meant for you and you will find something else. My advice, if you really want the home, make sure your agent is aware of that so she/he can advise you wisely on what you should offer. I never try to push clients to offering an amount they are not comfortable with, but one time last year a buyer of mine received a counter on a bank owned home he had made an offer on. They wanted to think about it for a day, within that day of thinking about it the bank received another offer and we were informed that we had 24 hours to get in a highest and best. My buyer told me he wanted to offer x-amount that was about a $2,000 difference in what the bank had countered him. I knew that was a bad decision so I told him, “Look, you have a huge advantage over the other buyer. You know the exact amount the bank wants to net. I think you should at least offer that and if the other person offers higher than ok.” Thankfully he took my advice and him and his family moved in a month later very grateful for the advice I had given. I strive to make sure none of my clients ever feel regret when they look back on their home buying experience.
If you are thinking of buying or selling, please reach out to our team! We would love to represent you during this exciting time!