When Multiple Bids Compete for a Summit County Property
By Craig Walsh
Over the last ten years, the Summit County real estate market has steadily shifted to more of a seller’s market. It is now common for sellers to receive multiple-bid offers for their Summit County CO real estate. From the vantage point of a seller of Summit County CO real estate, receiving more than one offer is great! Sellers in these cases should be aware that the seller’s agent must disclose the fact that multiple offers exist. However, it is not necessary for the agent to disclose the details of the offers.
Looking from the vantage of the buyer who wants to acquire the Summit County CO home, that buyer must be careful during competitive negations not to overpay. The buyer, therefore, needs an agent who understands the nuances of how to submit the offer and how to play his cards right. The buyer’s agent needs to know what and what not to communicate to the seller’s agent. Below are the best ways for both agents to logistically increase the chances of optimizing the goals of the seller and the buyer.
An agent for the seller should:
Pay close attention to the terms of each offer. The highest-priced offer may not necessarily be the best offer. Additional conditions may reduce the bottom line. The seller needs to make sure that his agent explains the details of the offer so that he can make the best decision.
Advise the seller to possibly use the “Best and Final Strategy.” In a multiple-offer situation, it is usually the most effective way to elicit the best and highest offer from buyers. If the seller elects to use a different type of offer, his agent should make sure that he understands the ramifications of that decision.
Know how much the other buyers could be made aware of. There are two schools of thought on this. On one hand, disclosing the terms of other offers could result in competing buyers withdrawing their offers. On the other hand, if a seller allows his agent to disclose the information, he may end up with a higher price! Either way, the agent should clarify any repercussions and will likely request written permission to disclose this type of information to the buying party.
Encourage the seller to respond and communicate equitably between all the agents for the buyers.
An agent for the buyer should:
Not tell the listing broker or seller that they have an offer too soon. They should say: “I’m just calling to see if the property is still available. My client is looking at this property and a few others.” and/or “If another offer comes in, give me a call.”
Contact the buyer immediately to see how much he wants the property. If the buyer is motivated, the buyer needs to make the offer as strong as possible. He could do any or all of the following: a) increase the price and/or the earnest money deposit as much as possible, b) pay cash, c) waive any or all contingencies (financing, review of legal documents, inspection/resolution). If the contingencies are waived, the buyer may have to sign a release of liability with his agent.
Ask the listing agent what the “positioning” is of the buyer’s offer compared to the other offers. The listing agent doesn’t have to disclose this information unless instructed to do so by the seller.
Ask to shorten the acceptance date as much as possible, as little as a few hours to a maximum of ½ day.
Possibly write a cover letter about the buyer to personalize the offer and show his motivation. This could accompany the agent’s e-mail that forwards the purchasing contract (offer).
Articles © Copyright 2006 by The Walsh Group