Dealing with Multiple Offer TransactionsBy; Gary J Venice November 14, 2014
One of the things that home buyers can be faced with when they are ready to purchase a home is the existence of multiple offers on a property. This can be more common than one would expect, especially in markets that are recovering. There are several aspects to the multiple offer transaction that a buyer should understand.
First and foremost, it is the Seller who controls how multiple offers are handled. The listing agent; to be sure, has a duty to his or her client to give the Seller guidance in regards to negotiations. Our code of ethics is very clear regarding the listing agent’s responsibility. It says under Article 1 of the Code of Ethics the agent shall “protect and promote the interests of their client” and to “treat all parties honestly.” The buyer therefore should understand that the agent is simply conveying the conditions set out by the seller.
Next, buyers should also be aware that their offer may not be treated as privileged information unless it is agreed to by the seller prior to the offer being submitted.
Our Standard of Practice section 1-13 gives guidance for both buyer’s agents and listing agents about disclosure of the terms of the multiple offers. “When entering into buyer/tenant agreements, REALTORS® must advise potential clients of the possibility that sellers or sellers’ representatives may not treat the existence, terms, or conditions of the offer as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement struck between the parties.
Buyers should sit down with their agents to discuss and have a plan in place in the event that a multiple offer transaction is encountered. This should include the potential of removing stipulations that may be impacting the offer as well as the pricing concessions the buyer is willing to make. The buyer should also be aware that when the seller requests “the highest and best offer” it means just that. This typically means the seller will make their final decision on the offers. It behooves the seller to put their best foot forward.
By having a discussion with their Realtor, a buyer can navigate the multiple offer scenario in a low stress, businesslike manner and be confident that by following some pre established guidelines they achieved their goal, either getting the property or walking away with the knowledge that the emotional impact of the process was managed and the buyer did not go beyond their budget.