When you’re selling your house, you may be lucky enough to receive multiple offers.
This means your potential buyers are in competition with one another – and it’s smart to let them know immediately what they’re in for. That way, they can think in terms of outbidding each other from the get-go.
As a seller, you’ll need to evaluate each offer fairly to reach the perfect decision. So, to help you with this process, this post will show you how you can handle multiple offers on a house.
The Smart Way to Handle Multiple Offers on a House
Slow the Process Down
You may receive an excellent offer the very first day your property is listed. If so, that’s fantastic! It means you have a solid property being sold around the right price point.
But hold your horses – you don’t want to accept any offer just yet.
If you’re in a seller’s market where listings can sell almost immediately, you have a competitive advantage. In these environments, sellers mistakenly believe that they should jump at the highest offer they get in the first few days and begin the closing process.
There’s a bit more to it than that, so be careful and slow the process down. Your priority here is to review everything about each offer to determine what’s best for you.
Compare the Offers
It’s good to know in advance what your buyers want when you have multiple offers on a house. This is usually the lowest price on the most favorable terms.
You want the highest price on the most favorable terms for yourself. And if you’re in a seller’s market, you can prioritize your needs over those of your buyers.
But you need to approach comparing the offers with care. Weigh your options, because you could make or break the best possible deal on your property in this step.
If you disclose information about one buyer’s offer to make another buyer more likely to raise their price, that buyer may choose to pursue a different property. If you tell your potential buyers to issue their “best offer” in the hopes of spurring on a spirited competition for your property, they may look elsewhere.
There are rarely simple answers to these complex situations. Buyers know that you can only choose one of them and that the rest will be left disappointed – so you should recognize that you have the upper hand. But stay ethical and honest with all parties, and cooperate with everyone involved to avoid any frustration or misunderstandings.
Consider the Payment
One major bonus some buyers may offer is to pay in cash. If you receive this sort of offer, it means you won’t have to wait for a lender to approve the home loan.
Most of the time, though, a buyer will need to secure a mortgage from a lender. This adds an extra wrinkle to your selling process – you’ll have to consider whether the buyer is preapproved for the home loan or not.
If a buyer is preapproved, their offer is far stronger than an offer from a buyer who hasn’t made any financing arrangements yet.
So, choose whatever offer is strongest and most likely to get you your money the soonest.
Review the ‘Extras’
Buyers might tag on a lot of little minor details to sweeten the deal. This lets them stand out against other potential buyers when they know they’re in a seller’s market.
Some buyers may be willing to close within weeks, while others may need to wait months. Depending on your situation, either one of these scenarios may work better for you.
These kinds of contingencies can tip the balance in favor of certain sellers, so always be mindful of what they offer and what will work best for you when closing time comes.
How to Communicate with Buyers
The most ethical way for you as a seller to handle multiple offers on a house is to take them one at a time.
Tell each potential buyer you’re reviewing their offer and that you’ll get back to them by a specified date or time. Then, if you have multiple offers, go back to those that you like the most and ask for their “highest and best” offer.
If you repeat this process until you feel you’ve reached the perfect combination of price and contingencies, you can accept the offer. But remember, this is your game to play – if you think you’ve rushed the process and that there could be a much better offer right around the corner, bide your time.
It’s possible that you may alienate potential buyers who don’t offer you exactly what you want. Unfortunately, this is often a fact of life in multiple offer situations. If the buyer is truly interested in your home and can afford to buy it at whatever cost, they’ll stay at the table throughout the bidding process to prove that to you.
Your buyers are your customers. Your duty is to find the best deal for yourself in this situation. So, be as diplomatic as possible in your efforts to secure the best possible deal.
Once an offer is presented, it’s usually a wise move to make a counteroffer. You never know if the buyer will accept your counteroffer to make a purchase or not.
In a multiple offer situation, perform this step with every potential buyer. If you don’t, you might be charged as unfair or discriminatory.
As a seller, though, you have the option of accepting any one of the offers or negotiating more directly with one or more buyers. In most cases, if you play your cards right, your counteroffer strategy will result in a better overall price.
Give all the buyers a minimum of 24 hours to respond, and check with your attorney to determine what language must appear in the contract to make sure you don’t accidentally sell your house twice. That language will usually appear like this:
“This counteroffer is being made to multiple prospective buyers. This counteroffer is not to be considered binding on the seller or buyer until it is signed by all parties.”
One last thing: don’t counter back on a buyer’s “best offer.” You’ll end up losing buyers and insulting people in the process.
When you receive multiple offers on a house, you can definitely enjoy the show. Yes, you should be careful and follow all of these tips, but at the end of the process, there’s no doubt that you’ll have the best possible outcome.
If you have any other questions about selling your home or buying your new property in the Austin, Ft. Hood, or Killeen areas, contact me today!