When it comes to selling your home, the dream scenario is to get multiple offers from buyers competing with each other to raise the price. In a hot seller’s market, it is not unusual to receive 10 or more offers for your home. Whether you have just listed your house for sale by owner or are preparing to offer it for sale, you should be prepared to process multiple offers, discern the difference between the offers, and to leverage those offers to get the highest price while navigating the terms of a 19 page purchase contract with over 100 paragraphs of legalese.
Here are a few tips to help you negotiate multiple offers:
Compare the Offers
Organize the offers from the buyers in a way that makes it easy for you to see what each one includes, so you can easily and efficiently weigh the pros and cons.
Salient points to compare are:
- Purchase price
- Close date
- Commission to agent
- Earnest money deposit
- Down Payment
- Contingency removal timelines
- Proof of funds for down payment and closing
- Who pays for what services (escrow, title, home warranty, inspections, retrofit, etc)
- Change of possession terms
It is important to prioritize offers that are preapproved for a loan, will give you ample time to move, can be flexible and have few or no contingencies at all.
Tip: Most buyers do not open with their very best offer, and typically leave room for negotiation. Do not eliminate buyers based on the initial offer price alone. Counter all offers in writing with what you will do, versus what you won’t do.
The Highest Offer Isn’t Always the Best Offer
While it’s usually a priority for sellers to make as much money as they can on the sale of their home, it’s not necessarily the top priority for every seller. A high offer means nothing if the buyer can’t follow through. You want to evaluate the offers based on the likelihood that it will close.
The best offer is the one that will meet your needs as the seller. Is your goal to close fast? Be able to rent back the home for a few weeks? Are you worried about having to make repairs or the house not appraising? Sometimes an offer addressing items that are important to you (other than price) could be preferred over the highest offer.
Tip: If one offer is significantly higher than an offer with better terms, you can counter the highest offer with the better terms and counter the offer with better terms with a higher price to see if you can get one of them to give you the best of both offers before deciding on the right offer for you.
Get Ready For A Bidding War
The big difference between responding to a single offer versus multiple offers is the form.
In a single offer scenario, a buyer makes an offer and the seller can accept, reject or counter. Assuming the seller counters, the buyer now has the option to accept, reject or counter and this process continues back and forth until the parties agree or one of the parties quits.
This does not work in a multiple offer situation. If you have three offers and you counter all of them and all three buyers accept, who are you in escrow with? You can’t sell the house to all of them, so when negotiating with multiple buyers, we use the Seller Multiple Counter Offer form. This form specifically discloses to the buyer that you have multiple offers and even if they accept your counter offer terms, you are not in escrow until you confirm acceptance of their offer over the others.
There are a lot of nuances involved in a complex multiple counter offer negotiation that maximizes price and gets preferred terms. The use of the right form and the right language in the offers protects you from accepting any offer until you have fully explored all offers to find the right one for your situation.
Tip: If you have one low offer and one high offer, you want to do the multiple counter offer process to get the higher offer to go even higher. Use the low offer (you do not have to disclose the offer amount) to create fear of loss in the good offer and use that leverage to get an even higher price.
Do not trust the buyer’s agent to represent you
The buyer’s agent job is to represent the buyer. That means putting the buyer’s needs ahead of the seller’s. They have an obligation to deal with you fairly, but that does not mean get you the best price or terms. Just because you pay the buyer’s agent a commission doesn’t mean he or she represents you. Trusting the buyer’s agent to represent you as the seller is like going to court without a lawyer and letting the opposing counsel represent you. It is just a bad idea.
Tip: Use a seller representation service to get professional guidance during the complex paperwork including negotiations, purchase contracts, legal disclosures, contingency removals, request for repairs, and coordination of escrow and title.
Getting multiple offers on your home is exciting, but it can also be overwhelming if you are trying to figure it out along the way. Follow these steps and you will get the best price and terms to lower your stress, reduce your risk, and maximize the asset value of your home!
Everhome’s Sold With Owner Program
If you already have a buyer, but aren’t prepared to manage the complex steps that come next, our Sold With Owner program might be the right fit. It was designed to provide home sellers with a full service seller representation through the critical and more complex elements of the transactions like, negotiations, purchase contract, mandatory legal disclosures, contract disputes, request for repair negotiations, contingency removals and all the details associated with escrow and title. For a low set fee (regardless of the price of your home), we make sure you are properly (and aggressively) represented so you are not taken advantage of, and get the best price and terms when you sell your home.
Everhome’s commitment to you includes:
- A dedicated, full-service seller representation from a licensed agent (professional negotiator)
- A compliance manager for legal paperwork and disclosures
- Coordination of all inspections
- Request for repair consultations and negotiations
- Contingency removals
- Contract disputes
- Field all questions from the Buyer or buyer’s agent
- Buyer qualification
- Time saving e-signature for most documents
- Escrow and title coordination
- Errors and omissions insurance
- Secure document storage
- Free legal consultations
We have the experience and expertise needed to protect you and get your transaction closed. Our clients often tell us over and over again what a great value they get after seeing how much more money they net as a result of our representation. Take a look at some of the 100+ verified 5-star reviews and decide for yourself!
If you’d like to chat, call us at (805) 379-3300 for a free consultation. We’re here to help!