It Was Almost Perfect…
You found the perfect Realtor, did your homework, and found an amazing house in a great location. Even better, the price was within your budget. You’d already been pre-approved for financing, and the property wasn’t pending sale. You didn’t lose a second and immediately worked with your Realtor to get your offer ready. Your agent presented the offer to the listing agent, and you waited patiently — albeit anxiously — for a response.
Then, it happens. Your agent gives you a call, “Just heard back from the listing agent. An offer came in last night. She texted me just as I was emailing you back and told me another just came in, too. I’m not sure where they stand, but they’re considering them all. I’ll keep you posted.”
Unfortunately, you’re now in a multiple offer situation. Your heart sinks as the perfect home slips further and further away in your mind. You were so close. You replay the conversation in your head, processing what the agent said, and you quickly find yourself getting mad.
Sure, an offer came in before yours, but what about the other offer? They couldn’t possibly be considering it, right? Yours came in first! And that second offer — did the listing agent tell another buyer what your offer was, and they one-upped you just a few minutes later? Your mind is racing through all these possibilities, and you’re getting more and more frustrated.
Slow down (more importantly, calm down). There are some things you should know about being in a multiple offer situation. While you might think or feel that you deserve a spot in line or a “first dibs” on the seller’s consideration, that unfortunately isn’t the case.
There May Be Offers You Don’t Know About
The listing agent was kind enough to tell your agent that other offers came in, but she didn’t have to. It’s not an obligation or legal requirement, though sellers can allow their agents to disclose the existence of a multiple offer situation. How would you have felt if there was no communication, and you lost the home without knowing about the multiple offer situation?
Order of Receipt Doesn’t Mean Order of Importance
In a multiple offer situation, sellers and listing agents can consider any offer received at any time. There’s no requirement obligating them to consider an offer received a day earlier. The seller doesn’t have to counter you or even give you the right to increase your offer if someone else outbids you. If a competing offer came in, and the seller simply wanted to accept that offer instead of yours, they’re within their right to do so.
The same goes for full-price offers. If you offer full price, but the seller still rejects it, understand that this might be due to an offer coming in over asking price. Or, the seller may simply decide to sell the home to a friend or family member simply because they want to. The only time this might get a seller in trouble is if you’re a member of a protected class, and the seller deliberately chose a competing offer instead of yours out of discrimination.
It’s Not an Agreement Unless It’s in Writing
Let’s say your agent submitted your offer, and the seller and their listing agent agreed to it verbally while the agents were on the phone. Unfortunately, that’s not a binding contract. If another written offer comes in that’s better than yours and is accepted, you may be out of luck. That’s why it’s important to get everything in writing.
When the seller agrees to your offer, the next step will be to execute a purchase contract, in which both parties sign the offer. This and this alone can prevent a multiple offer situation from occurring, as the property would be listed as contingent and could only accept another primary offer if your contract falls through.
Competing Offer Terms Don’t Have to Be Disclosed
You remember that when your agent called back with the bad news, he didn’t know what the competing offers were. Sure, you’d probably want to know how much you were outbid by — you might want to offer more, after all. But in this instance, the seller’s agent didn’t say. She just said other offers came in. And that’s OK. It may be that the seller doesn’t want to endure a lengthy bidding war and needs to get the property sold.
Conversely, the seller could have told your agent what the offer was in hopes of getting you to counter. This can pose a challenge for some. Sure, sellers want to get the most for their homes, but when does it become a matter of greed? As a buyer, know your limit in terms of how high you’re willing to go above your original offer. Don’t allow yourself to be pressured or maneuvered into a bidding situation you’re not comfortable with.
Be Careful With Countering
Let’s say you offered $10,000 below asking price for a home. The seller counters to $2,000 below asking. You counter again at $8,000 below. If the seller outright rejects your counter without making a counteroffer again, you can’t go back and accept their $2,000 below-asking price. That’s because you as the buyer terminated the seller’s counteroffer by countering again. It can’t be accepted again unless — due to circumstances that arise — the seller decides to reinstate their original counter.
Lean On Your Agent For Guidance
If you find yourself in a multiple offer situation, discuss it with your Realtor. They’re there to advise you and work in your best interest. If counteroffers are driving the price of the home you want beyond what you can afford (or what you’re pre-approved for), recognize that you may need to walk away. While it may be disappointing, remember that other homes are for sale, and your Realtor will be there to help you find another that fits your wants and needs.