What You Will Learn in This Article (Reading Time – 5 Minutes):
- What the pros are of receiving multiple offers
- What the cons are of receiving multiple offers
- How to analyze which offers to consider
- Negotiating during a multiple offer situation
Receiving multiple offers on your home can sound like a dream come true. Multiple offers are usually associated with a hot real estate market, a truly desirable home or a home that is priced below market price. Regardless of what has caused you to receive more than one offer on your home, you should be aware of the pros and cons associated with this and the proper steps to take to ensure the best possible outcome for you.
The Advantages of Receiving Multiple Offers
As you might imagine, there are many benefits that you can enjoy when you receive numerous offers on your home. Most notably, you have the flexibility to review all of the various components in the offer to determine which option may be more financially beneficial to you as well as more practical and reasonable. One offer, for example, may be $10,000 or more higher than another offer. If you need to close quickly, you may be able to choose an offer with a more expedited closing time frame. A cash buyer, for example, will usually close more quickly than a buyer who is applying for a home loan.
When you review offers, you may also be able to determine who is more interested in a hassle-free transaction. Consider if one offer had multiple contingencies and asked you to pay for closing costs, but another offer had no contingencies and did not ask you to pay for closing costs. The ability to compare all of the factors in a sales contract and to choose the one that is most advantageous for you is ideal.
The Disadvantages of Receiving Multiple Offers
Nonetheless, there are a few downsides associated with receiving multiple offers on your home. Some buyers are opposed to being involved in a bidding war. This is particularly true in a hot buyer’s market. The buyer may feel as though there are many other homes that are equally as desirable as yours, and he or she may not be interested in negotiating at all with you. If you present a single counter-offer, there is a good chance that you may lose the buyer’s interest altogether. In addition, if you receive multiple offers on your home, you may be inclined to attempt negotiations with the best offer so that you can obtain even more advantageous terms. For example, with a full-price offer on the home and a second offer on the table, you may be interested in negotiating to see if a buyer is interested in paying more than the asking price. Some buyers may be insulted by this, and they may simply withdraw their offer entirely. You do not know how a buyer will react, so it is important to tread lightly even though a multiple offer situation may seem like you have the upper hand.
How to Analyze Your Offers
If you are in the fortunate position of having multiple offers on your home, you should carefully analyze each offer in relation to your needs and goals. For example, does one offer require you to sell the home before you are ready to move out? Does another offer provide you with a much higher sales price? Consider the factors that you are comfortable negotiating with and the factors that are simply not feasible for you. You may be able to negotiate some hot buttons, so do not entirely write off offers that are not perfect or even those that seem to have major flaws or issues for you. It is wise to make a list of the pros and cons of each offer that you have received. This is especially helpful when you are comparing three or more offers because it can help you to stay organized and to analyze the pros and cons more clearly.
Pitfalls to Avoid When Analyzing Your Offers
Many people who receive multiple offers on their home only look at the matter from a financial perspective. It is certainly important to get the maximum return possible when selling your home. However, factors such as how easy a buyer may be to work with, how negotiation-happy they may be or how quickly they can close are also important. A buyer who is willing to offer a larger earnest money deposit on the home, who may waive the property inspection or who is pre-qualified or paying cash for the home may also be viewed more advantageously.
How to Negotiate Strategically to Get the Best Offer Possible
It is possible to negotiate with all potential buyers if you want to get the absolute best price available. You may respond to each buyer and ask for their absolute best offer to be submitted by a specific date. The other option is to present a counter-offer to one buyer with a much shorter response time requirement. Remember that some buyers may not be interested in proceeding with a stressful bidding war, and you do not have any way to predict this with certainty. Therefore, ensure that all demands or requests that you make to a buyer are respectful, appropriate and reasonable. Just as you may decide to not accept an offer from an unreasonably or demanding buyer, a buyer may walk away from a deal with a seller who is perceived in the same way. Your real estate agent can help you to more strategically negotiate to get the best deal possible on your home.
If you have received multiple offers on your home or if you believe that this may occur, it is important to work with your real estate agent. At Evergreen Properties and Investments, our experienced real estate agents have successfully guided our clients through this type of situation many times. We have the knowledge and expertise of multiple offers that is necessary to help you to achieve the best overall results possible when in this situation. To learn more about our services or to schedule a consultation with one of our friendly real estate agents, contact us today.
From the Author: My name is Dan Barcelon and I believe that Real Estate can be one of the most valuable assets you’ll ever own. I’m dedicated to educating and guiding my clients on how to manage and leverage their homes to create an Evergreen legacy for themselves and their family. I primarily consult both home buyers and home sellers on reaching their personal and financial goals through Real Estate in the following cities of Southern California: Long Beach, Carson, Cerritos, Signal Hill, Torrance, Lakewood, Cypress, Downey, Bellflower, Norwalk, Wilmington, La Palma, and Artesia.
If you’d like to discuss if buying, selling, or investing in real estate is right for you at this time, feel free to reach out. You can call/text me at 562-270-5812, or you can e-mail me at danb@EPIrealestate.biz.