Aug 11, 2015

Six Tips for Home Sellers with Multiple Offers

Multiple offers are more common in this hot Dallas market. If you're one of those lucky (and smart) sellers, how do you review these offers and determine which one is the best?

There is no guarantee how any particular buyer will act, or react, in a situation.
However, you may want to heed the advice of someone with more experience with this than the average seller (or the average agent).

First, there are several negotiating strategies to consider. You can -
  • accept the “best” offer. 
  • “counter” one offer and reject the others. 
  • "counter” one offer and put other offers aside awaiting a decision. 
  • inform the potential buyers that you've received multiple offers and invite them to make their “highest and best” offer.
Each of these strategies has advantages and disadvantages. For example, inviting buyers to resubmit their “best offer” may produce an offer better than those “on the table”. But it could discourage buyers who feel they’ve already made a fair offer, causing them to end negotiations and pursue other properties.

Consider these tips:

  1. Understand the process and the rules. For example, you can only 'work' one offer at a time. And all agreements must be in writing. 
  2. Have a plan for evaluating the offers. Establish a time frame and don't let the best one slip away because you take too long. 
  3. Consider more than the price. Terms and contingencies can make or break a deal. Closing date, option period, mortgage terms, expenses, contingencies and many other issues will have an impact. Decide what is most important to you. 
  4. Quickly determine who is the best buyer. Get a pre-approval letter from their lender, ensure they are qualified and that their earnest money is sufficient enough to be painful for the buyer to forfeit. They may not be your highest offer. A buyer can make a high offer just to “win” the bidding war, but they could second guess their decision and walk away during the option period. You want a buyer who is committed to the home and will likely close. 
  5. Don’t take it personally. Remember that this a business transaction, and everyone's money is the same color of green. Don’t be offended or make an emotional decision. 
  6. Always try to get a backup contract. 
And remember that once you accept an offer or sign a contract, the work really begins. As the homeowner, the ultimate decision on what to do is yours to make.

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