A Good Problem to Have: Multiple Offers
- posted 7.17.2017
- Nicole Johnson
- Real Estate Tips
It's always good news when a marketing plan you've put together for a client works so well that the home receives multiple offers. Once it has, you are in a much better position to help the seller make the most of the situation.
Guiding clients through the good fortune of having the upper hand in a home sale negotiation often starts with making it clear to them that selling is about more than price. It's about receiving the highest offer with the best possible terms. Realizing these terms starts by culling the list to the most attractive buyers.
Types of Buyers
As you review the offers with your client, you will want to explain the merits of each type of buyer. For instance, a cash buyer typically represents the greatest likelihood of a quick and easy closing.
Buyers who are motivated by personal circumstances—those who need to get their children settled before the new school year starts, for example—are also good candidates. They not only will be looking to close quickly, but they may be willing to pay more to accommodate their timelines.
Many offers are made with contingencies. The ones with fewest strings attached tend to be more compelling than those that ask for special accommodations. It’s also worth considering the financial arrangements of some of the interested buyers.
Requesting a Final Offer
Once your client narrows the list of offers, it’s time to go back to the remaining buyers and explain that, given the situation, you are inviting them to resubmit with new and final offers. You may also want to relay your client’s preferences, such as no contingencies, a longer or shorter timeline for closing, or more earnest money.
It may be possible that a bidding war ensues, and the offers reach a level that potentially could exceed the appraised value of the home. In this case, you may want to suggest your client counteroffer with a request to remove the appraisal clause. This would mean that if the home appraises for less than the accepted price, the buyer will make up the difference in cash.
Keep Things Moving
Your job throughout the negotiations is to keep the playing field level and communications open and clear. You may want to exercise even greater care than usual and favor telephone and in-person conversations. Messaging nuances and misspellings in texts and emails can create confusion and should be avoided when selling what is probably a client’s largest asset.
Reaching a Decision
Be prepared for the highest price not to be the selling price. In competitive markets and depending on your client’s feeling toward the home, the highest price could come in second to the prospects of an easier closing or even an emotional connection.
When a childhood or family home is involved, the client may be more comfortable selling to a buyer that reminds them of themselves. This is why many buyers will include a personal letter about their own feelings toward the home to elicit an emotional predisposition to their offer. It’s also why some Real Estate Agents suggest their clients not read these letters. However, if a client is emotional about selling, a letter may give them the comfort they need to feel good about their decision.
Whatever your client’s ultimate choice under these circumstances, you’ll know that you performed as promised. You not only helped them realize the highest price for the best terms, you enabled them to move on to the next phase in their lives.