Many people do not fully understand how to handle a multiple offer situation. Statements like: “the seller must answer my offer first because it came in first” and “the seller has to take my offer because it is a full price offer” are not true. There are many misunderstandings about what a seller has to do when supplied an offer. In Texas, a seller actually is not forced to do anything. Just because the seller is not forced into any action does not mean the listing agent is not. Also there are some guidelines of ways to handle the situation so that neither the seller or the listing agent come off as favoring one buyer.
The listing agent and the seller should deal with the multiple offer situation before it arises. The seller and the listing agent need to decide how they would handle a multiple offer situation before the house goes up for sale. You can decide whether to tell all other agents who are involved or non of the other agents involved. This is an all or none situation. In order to stay in ethical bounds it is smart to treat every other agent the same so you must decide to tell all or tell none.
Calculate the best offer. Once all the offers are presented to the seller, the listing agent should calculate the seller’s best choice. There are many factors to an offer such as sales price, closing costs, home warranty options, etc. so it is important to pay close attention when deciding the best offer. *Remember: If there is a full price offer, the seller is not required to accept it but the listing agent may have to pay a fee per the listing agreement.
Accept, Reject or Counter. The seller now needs to make a decision on whether to accept, reject or counter the offers. The seller may accept or counter the best offer. (It is not a good idea to counter more than one buyer- remember a counteroffer remains open until the buyer rejects it or withdraws.) The seller may also reject all offers. (With a rejection, have the listing agent present the Seller’s Invitation to Buyer to Submit New Offer with suggestions that might give the buyer’s agent an idea of what is acceptable.) You may reject a couple and see what the new offer is before accepting one of the first offers. *Remember: Do not share more information with one buyer and not the other, especially if you are the listing agent.
Move forward with one contract. Once one contract has been accepted and executed you move on like a normal transaction.
Remember that it is always nice when a property attracts multiple offers, just make sure as the seller and listing agent you handle the situation properly. If you ever have any questions regarding a multiple offer situation please feel free to call or email Terri or Kristen.
Picture by 05com