Managing multiple-offer situations. In a market with such tight inventory, multiple offers on the same property are on the rise. It’s important to represent the buyer’s best interests in these scenarios, but agents need to remember that they are bound by NAR’s Code of Ethics and state regulations. Remember, the seller has to agree to disclose that a multiple-offer situation exists, but is not required to do so. Your team should be ready to help buyers understand:
• The pros and cons of various negotiating strategies. For example, a low initial offer can lead to a good deal for the buyer, but it can also lead to the buyer accepting a different, higher offer from another buyer.
• That cash offers are a great incentive for sellers.
• Other terms can also make a deal more palatable, such as willingness to be flexible on the seller’s timetable, doubling the earnest money deposit amount, or agreeing to pay all extras, such as closing costs.
• That escalation clauses have begun to reappear in offer letters. These clauses, which have some risks, state the buyer’s willingness to pay a certain amount above a verifiable offer the seller has received, up to a certain limit.
Even with strong negotiation and competitive offers, buyers still may be outbid and can end up disappointed and frustrated that their offer was not accepted. Unfortunately, this can happen repeatedly in certain highly competitive markets. It’s important to treat buyers fairly and honestly and keep communication prompt, open and ongoing.
