In a competitive market, buyers are looking for any strategy that could give them an edge when it comes time to make an offer on a property. Use these tips to help your clients win more multiple-offer scenarios.
Offer a larger option fee.
This shows your client is serious, and a large option fee is another financial incentive to buyers.
See if the lender can contact the listing agent.
If your client would like, having the lender contact the seller’s agent can offer additional assurance that the sale will close.
Consider a personal letter.
A letter from your clients explaining why they are right for the property can offer an emotional pull if done correctly. However, some listing agents warn their sellers against reading personal letters because of the potential for fair housing-related claims.
Ask about variable commission rates.
If the listing broker discloses a dual or variable commission arrangement (or it’s listed in the MLS), ask what the rates are, taking the difference into account when helping your client craft the strongest offer. The Code of Ethics requires you to inform your buyer of the rates if you know.
(Read more about what disclosure is required for dual or variable commission arrangements.)
Pay for the extras.
If offering more isn’t an option, consider paying for items such as title policies, surveys, or residential service contracts.
(Remember that listing agents are only required to disclose if there are multiple offers when they have the seller’s approval to do so, per Standard of Practice 1-15 of the Code of Ethics.)
(Remember that listing agents are only required to disclose if there are multiple offers when they have the seller’s approval to do so, per Standard of Practice 1-15 of the Code of Ethics.)
… UNLESS any ONE of the agents knows that there are multiples, (such as you let it slip in your office or you, yourself wrote one of the offers… in these cases, you MUST let everyone know.
If you let it slip in your office, and your office (broker) isn’t representing any of the offering buyers (intermediary), you’ll be safe. All agents at the office at that point would represent the seller.
I’m having trouble thinking of a scenario where it would not be in the best interest of the Seller to notify all buyer’s Agents that there are multiple offers… Can someone help us out here? If a Buyer knew there were other offers, he might bid a little higher. ~Isn’t that what the Seller wants him to do?? But if the Listing Broker has an offer on the table, then he might not want more competition. How can we police this industry for the unethical listing Brokers/Agents…? (Please don’t say that the “Code of Ethics” does that for us…) ~How… Read more »
In some situations disclosure of multiple offers could cause some buyers to not submit an offer, which is not good for the seller. Seller has the most at risk, so should be their call.
Rick, you don’t know… For the same reason Seller does not have to respond to an Offer ( not in a multi-offer) or for an Amendment request under Active Option. Buyers and Buyer’s Agents are at the mercy of the Seller. The sad part is that the Code of Ethics apply to us the Realtors but there are no rules apply to the consumers.
I totally agree. Just lost out on a sell because of multiple offers and never knew there was another offer on the table. We could have given it our best shot which would have benefited the seller. I am waiting for it to close to see if it was the listing agent or their office who had the other buyer. There is no way to police this except change the code that all parties should be notified if multiple offers. This is only way to be fair.
Hi Rick. Of course it’s up to the seller to decide if they want to disclose multiple offers. I’ve seen where a buyer was able to submit a strong offer with a time limit to get it executed that effectively prevents a multiple offer “highest and best” scenario. The seller felt good enough to accept the offer instead of asking for “highest and best” from everyone. I’ve been on both sides of this scenario so I seen it work. What is in the best interest is ultimately up to the seller to decide and sometimes not calling for “highest and… Read more »
I am concerned about the “send a letter” suggestion, please suggest buyers discuss the pros and cons of this practice with their attorney.
Hi Avis, what is your concern about the letter?
A recent article in Texas Realtors magazine pointed out that some discrimination issues may surface if the letter isn’t carefully written. We are never certain of a seller’s motive to sell and a letter could potentially do more harm than good.
Why would the buyers need to discuss with an attorney?
As a broker I’ve warned my agents about the “love letter”. Especially those with pictures.
I’m confused, and would love someone to educate me on this. Are REALTORS NOT allowed to let us know the offers, so that the buyer can know what to bid?- This way the seller gets the most money? If we know that the offer is $400,000, then can’t you tell everyone and let them decide how much they want to bid? Say someone said okay, I will bid $410,000. Doesn’t the seller aquire more money in that scenario, other than this highest and best blind bidding..? Please explain- is this a law- that the purchasers are left in the dark… Read more »
You cannot have a live auction and less you have a auctioneer calling the auction. It is under the TDL our rules and regulations. Texas Department of licensing and regulation which governs auctioneering
No, Blair, there is no law saying that the amount of an offer cannot be disclosed if the seller wants to. The problem is that many uninformed listing agents want to be in control of the scenario, and they have not bothered to educate the seller, so he does not understand his options. No one has mentioned in the discussion above how a ‘cover letter’ could lead to issues of discrimination. If the buyer wants to tell the seller something personal, that should be his choice. ~And what could be more discriminating that the practice of asking for a copy… Read more »
Sometimes listing agents list on the low side just so as to encourage a multiple offer situation and cause a “feeding frenzy” mentality
Eric Matheu- there is nothing wrong with that strategy. Our job is to do what is best for our client, and multiple offers is in the sellers best interest. You can run absorption and competition analysis all day long, but no one has a crystal ball. I typically price based on appraisal target, and in some instances, I get multiple bids over list. At that point, I have to convince an appraiser that the value is there, and what better way than to offer up the multiple bids. Sometimes they agree, and sometimes they don’t. Multiple offers is not a… Read more »
Hi, Jarod, this is exactly what I would have posted. I’ll add that a listing agent does the client a disservice by doing things in a way that attracts buyers who wouldn’t be committed to the transaction. You can lose buyers if their agent gets mad about being treated unfairly. And in a heated multiple offer scenario, buyers who feel they paid too much sometimes cool off and disappear during the option period. A good listing agent uses judgment to determine not only who might be most committed, but also exactly when to inform all agents there are multiple offers.… Read more »
Hi Blair. The idea of not disclosing the amount of the other offers it that it could maximize what the seller gets. It’s not a law, just conventional wisdom. It puts the buyer in the position of submitting their “highest and best” offer. If the buyer knows the highest offer is $400,000 then they would submit just enough to beat the next highest instead of submitting their “highest and best.” It would be up to the seller to decide to disclose the other offers. Of course the buyer could put a clause in the contract that their offer is not… Read more »
Brian Holt- until the seller signs an offer, they are not bound by its terms. Nothing prevents disclosure of terms if the offer is shopped, and if by luck, it remains the best offer, the seller can always strike the clause and sign off. A waste of good ink while practicing law without a license.
I hope an attorney writes that clause! :}
Thank you for stating the information about the letter.