Receiving multiple offers on a listing is a good problem to have…especially in today’s market. However, each situation is different and you may have some questions on what to do in this situation.
The National Association of Realtors has a wonderful paper available on their website explaining what you can and cannot say and/or do in a multiple offer situation – “NAR Policy: Code of Ethics: Presenting and Negotiating Multiple Offers”.
Now, let’s talk about getting multiple offers on your listing. This gets my blood racing since I love the thrill of the multiple offer negotiation process! It’s like playing ping pong with a paddle in each hand and multiple balls on the table – I have to stay focused and coordinated…and I love to win.
Here are some of the more popular questions I’ve received lately on this topic that I think you can benefit from reading:
Can I present multiple offers to the seller side-by-side at the same time? Yes, assuming you received all the offers within a short period of time (over the weekend, over last evening, etc). You’ll want to lay ‘em all out on the table in front of the seller with a seller net sheet for each offer, including the proposed financing and proposed closing date. The seller gets to look at all of them, ask questions and pick a favorite to receive either an acceptance or a counteroffer.
Can I call all the agents submitting offers and let them know about the other offers? Absolutely! Their buyers may improve their offers if they know they have competition. For some unknown reason, some agents believe that this is a violation of the Code of Ethics or something called “shopping the contract”. Heeeeeelllllloooooooooooooo…it would be a violation of your duties to the seller NOT to shop offers around and try to get the best possible offer on his property. Agents who don’t shop offers around should be fired by their clients!
Can I tell the other agents about the competing offer(s) terms? Yes, but you must keep your client’s best interests in mind. Have you ever watched an auction? The auctioneer announces the starting bid and keeps announcing higher and higher bids as they happen. If you don’t want to bid higher than the last bid, you keep your hands still and be quiet, right?
Suppose you got a low offer and a full price offer on your listing on the same day. You call the “lowball’s” agent and tell him/her that you also have a competing offer. If lowball’s agent asks if the other offer is better, I reply, “Shoot, yes, it’s a whole lot better!” If lowball’s agent asks me how much the offer is, I can freely say that it’s full price. Guess what? If lowball wants the property, lowball now knows what to bid (and if he does step up to the plate, I’ll have a similar conversation with “full price’s“ agent).
But what if I get two lowball offers at about the same time? Call both agents and tell them they have competition. If either asks what the other offer is, you must keep your client’s interests in mind and say something like, “I’m not authorized to reveal that information.” And you’re not authorized (right?) to reveal that the other offer is also disappointingly low but it’s all you have? The seller would be angry at you if you do this, and rightfully so.
Some sellers just aren’t thrill-seekers, though, and may tell you to only present one offer at a time and not to tell them if a (much) better offer comes in until they exhaust the first offer. Ultimately, it’s their property and you have to follow your client’s instructions….even though it may not be as rewarding (or as much fun).