In some areas of our country, multiple offers are dominating the real estate market. On the Gulf Coast of Florida, it depends upon the price point. Today, we’ll look at this process from the seller and the buyer perspectives. Note, it is really key that your agent is a superior negotiator, a great communicator and that you understand the facts and allow them to be your North Star. Note, I’m doing this from the point of view of a Single Agent, which in today’s real estate world very few brokerages are prepared to be.I’m also basing this on Florida Real Estate Practices.
When you receive multiple offers your agent should prepare a spreadsheet with the following categories: Name, Price, Contingencies, Financing or Cash, Closing Date, Closing Costs, Title Insurance. This spreadsheet allows you to look at the facts easily on one piece of paper. You may select your best offer based upon a multiple of factors, including price and terms. After you have chosen the offer you will be working with then allow your agent to do the following with the other offers: on the front page of the offer write the time and date they presented the offer, write the word rejected and have you initial beside it along with your agent. Your agent can then take a photo of it and send it via their smart phone or scan and email. This is a courtesy that allows the other buyers to move on.
Another component of multiple offers may be to request a Highest and Best offer period. For example, you receive 3 offers today and you request that your agent does a Highest and Best Round that expires tomorrow at 5. Your agent does this in the MLS (you may get other offers on top of the 3) and they also give the details to the agents who sent the initial 3 offers. Please do not accept any offer until the Highest and Best Round expires. Your agent updates your Multiple Offer spreadsheet and you select the best offer for you. Note: there may be some buyers who do not wish to participate in Highest and Best. A great buyer’s agent always asks their clients how competitive they want to be in a hot market with multiple offers. When that agent understands their client’s appetite for competition they can best serve the client!
Here’s something you may not know – when working with a Single Agent you can instruct them to reject offers of this or that. You can also instruct them to tell buyer’s agents the price you want and the terms you want or what number someone has to beat. Agents don’t think they can tell another agent what number they need to be at, but they can, as long as you the Seller give them permission. It’s a great way to fine tune the negotiations. Do it in writing, please.
As I’ve stated in the Seller portion – you decide how competitive you wish to be. If you’re going to compete then you might also want to use an acceleration clause (email me at email@example.com for more details). Make sure you have the latest data on sold, active and pending listings – a good set of comparables will allow you to decide on the price, with the guidance of your well informed agent of course. I encourage buyers to include a letter to the seller outlining why they would be the best choice to purchase the home. I know I’ve told you to look at the facts, however real estate is emotional and a tug at the heart strings can help. But only if you’re 100% honest about it. AND you must give the Seller proof of funds to make the offer package complete. I would never accept an offer in a Multiple situation without seeing a letter from the buyer’s lender or bank regardless if it is cash or financing. You want to present the best package possible.
Make sure your agent follows the Multiple Offer or Highest and Best Round instructions. Don’t bother making low offers when you’re in a Multiple Offer situation. You’re wasting your time. Put yourself in the Seller’s shoes – what would you do if you were them? If properties are selling at 97% of asking making an offer at 90% of asking is not going to get you the home. You’re smart. You get that.
Back to the comps. Ask your agent to include the best comps along with the offer – it’s a great way to inform the seller that you all know the market. In some areas people are going thousands or tens of thousands of dollars over asking yours. price. If your agent has apprised you of the market, by the way data may vary from subdivision or even from street to street, you’ll know exactly what the expectations are. Stay informed. When you win, it’s like any other transaction and you move forward towards closing. If you do not, then it’s on to the next. Don’t get discouraged. Get educated.