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Ken Badertsc…, Real Estate Pro in Newton, MA

What's your strategy for handling multiple offers for your listing?

Asked by Ken Badertscher, Newton, MA Sun Apr 21, 2013

Recently I met a buyer at the first open house for a particular listing who was disenchanted with the concept of multiple offers. We posted in MLS that offers were due by Monday at a certain time. This buyer explained that he wanted to submit an offer on our listing for Sunday afternoon acceptance to "get in before everybody else."

I told him that we were simply trying to be fair to everybody involved, but he felt that the only person we were being "fair" to was the seller.

So my question is, given that only one person will be able to actually buy the home, how do you avoid alienating the competing buyers in a multiple offer situation? How would you handle a buyer who expects to be able to swoop in and lock up a property before anyone else is able to even write an offer?

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Answers

18
As the listing agent your legal and ethical duty is to the seller, no one else, right up until the time you become a 'disclosed dual agent' and even after that you have a legal and ethical duty to treat both parties fairly. If you gave a competitive edge to your seller, you were simply fulfilling that duty. Plain and simple.

I would not have put that language in the MLS. I would simply have taken offers one at a time and said the owner was reviewing the offer and would get back to the potential buyer with an answer by X date or time. Then, if I DID get multiple offers, I would have gone back to those who were in the ball park and asked for their 'highest and best' offer. I would have repeated that process until I had a winner!

Here in New Jersey we have a 3 day right of attorney review. During those 3 days either party can cancel the contract for no reason and with no repercussions, so it's not really possible to 'swoop in and lock up a property'.

As for alienating potential buyers, well that is just a fact of life in multiple offer situations. Some buyers may be offended and walk away, but if you have multiple offers, what difference does it make? Those who are truly interested in the home and can afford to buy it will stay at the table during the bidding process until someone finally wins the bid and gets their offer accepted.

I wouldn't worry too much about alienating some potential buyers. Until you become a 'disclosed dual agent' they are customers and not clients. Your real duty is to your client and if you remember that, and be diplomatic, you can't go wrong.
3 votes Thank Flag Link Sun Apr 21, 2013
Thanks for your insight Suzanne!
Flag Sun Apr 21, 2013
The only way to be fair to all potential buyers is to tell quick (and usually low-ball) buyers this: "If your offer is as good as you say it is, it will have no trouble competing successfully against the other offers when they're all in. If it doesn't win, it wasn't that good of an offer."
Ken, any broker who accuses you of representing only the best interests of your client needs to grow up and act like a professional - or find life elsewhere.
2 votes Thank Flag Link Sun Apr 21, 2013
In the specific situation you describe in your question, I'd write the offer and let the seller decide.


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1 vote Thank Flag Link Mon Apr 22, 2013
When we kknow wehave multiple offers coming in or if we have them already, I contact the buyers agents and let them know to submit "highest and best" offers by a specific time frame. This gives the other buyers a chance to improve their current offers or make sure they submit their best offer possible. I then sit down with the seller and evaluate each of them based on offer price, financing terms, dates and other details. Ultimately, I leave it up to the seller to make the decision based on their priorities.
1 vote Thank Flag Link Mon Apr 22, 2013
Hello, I like your answer. I wish more agents in my area would do this. I work mainly with buyers, and our offers often times just get ignored. It is very hard right now for buyers. Competition is very tight!
Kawain Payne, Realtor
Flag Mon Apr 22, 2013
Given that circumstances can be different (although, we, as listing agents, are always working in the best interests of the Seller), we typically advise our clients to ask for the best offer form all buyers interested. We try not to use the word "final" as you never know who's going to do what.

When the market is shifting back to the seller's side of things, many buyers are uncomfortable competing as it's something they're not use to given the long correction we have seemingly exited,
I guess I have been fortunate in never having that strategy backfire and, as such, we try to create that competitive situation when appropriate.
1 vote Thank Flag Link Mon Apr 22, 2013
It's just as hectic in California, 3 potential buyers at different times wanted me to represent them in the sale of my listing. I said no. There were at least 300 visitors to my open house in 2 days. When the offers were surposed to be submitted, I had all of them go to both me and my manager, put them on a spread sheet and chose the cleanest offer.

My first alliance is to the seller, not to a buyer who wants to be ahead of the others. The liability is huge trying to work both sides in this market.

In the end we recieved 10 offers.
1 vote Thank Flag Link Sun Apr 21, 2013
You would handle him/her in the same way you would handle any client. If they put a drop dead clause in the contract that is before the offers deadline, the seller and his/her agent (you!) need to deal with that. Than can mean answering this specific offer by the deadline or letting it die on the vine.
Also, as for responsibility to the seller, your absolute allegiance to the seller ends the minute you start talking to a buyer that you intend to represent. At that moment (at least in Florida) your absolute allegiance shifts from the seller to the transaction, and "getting it done" outwieghs getting the highest price for the seller.
1 vote Thank Flag Link Sun Apr 21, 2013
My strategy is to get the most money possible for the seller's home and with the least amount of contingencies in a time frame that works best for the sellers. Keep in mind that if you are representing the seller you can't really advise or show obedience to the buyer.
1 vote Thank Flag Link Sun Apr 21, 2013
As the listing agent your job is to get the seller the best offer possible for their home--and that doesn't always mean dollars and cents wise. It means terms as well. You've done a great job setting a level playing field for ALL potential buyers with the way that you have marketed the home--you are representing the Seller in the way you are obligated to do so. Your concern is not about alienating competing buyers--serious buyers will pull out all the stops to get the house they want...and that doesn't mean circumventing the process. Hold your ground...and best of luck!
1 vote Thank Flag Link Sun Apr 21, 2013
In this market it's best and final, feeling have nothing to do with it. If there is a deadline and you make a exception for this individual than you are not being fair to others. When a deadline is said and note it than you should honor that for everybody.

Best Of Luck.
1 vote Thank Flag Link Sun Apr 21, 2013
Piece of cake!
The seller has already presented the offer.
The buyer need only accept the 'suggested retail price" posted and we've got a deal.
Now that was easy.
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Oh, but the buyer wants to NEGOTIATE!
Now, where did fair go?
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There is not issue with alienating a buyer who is unwilling to compete. They are not real buyers.
They will submit offers that THEY KNOW are $20,000 light and blame their agent for not making magic happen.
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Ken, for the buyer in question, you offer tham an opprtuntiy to enroll in your 'First Look' program that is for serious buyers only. If they are serious, and recognize this opportuntiy, they WILL sign the contract and submit a retainer. Membership has it priveledges. And for these select and decisive buyers, you CAN engagge in specialized programs that can populate your 'First Look' inventory and NETWORK.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420. 4041
http://RealEstateMadeEZ.us
1 vote Thank Flag Link Sun Apr 21, 2013
I'd point out to the buyer why the seller is stipulating a specific time for offers, to maximize the possible number of offers and to get the best possible price and terms, and possibly logistics. . The seller is certainly not technically obligated to wait until a certain time and could accept an offer previous to the stated time. In my opinion such an action is not morally just and fair. I have had buyers insist on presenting offers before the stated time and the seller has simply refused to deal with us. And when the seller did consider all the offers, he was not pleased with our "swooping" tactics and even though we had made a solid offer, he decided to go elsewhere.

A good trick is to reverse situation and ask the buyer to put himself in the seller's shoes and ask how he would feel. Do unto others sort of thing.
1 vote Thank Flag Link Sun Apr 21, 2013
The listing agents job is to get the seller the most possible money for their home. If the agent communicates cleaand and honestly to all parties involved then that's all they can do. They aren't responsible for the others feelings.

Chris
1 vote Thank Flag Link Sun Apr 21, 2013
I was in total agreement with Mack until his last sentence. I also have seller's sign off on the offer procedure by documenting it in the listing agreement.
But I'm one of the crazies who DOES go after properties scheduled for auction in hopes of snagging it before it goes on the block. Works one out of 100 times.
0 votes Thank Flag Link Mon Apr 22, 2013
Can get sticky, a bring your best could loose all and working one at a time could backfire.
Suggest looking at all the listings factors when deciding which way to go.
0 votes Thank Flag Link Mon Apr 22, 2013
My strategy is to write in the "agent-only" remarks on the MLS that offers will be reviewed after such-and-such a date, and I have the Seller sign a letter to that effect.

I have had a couple of open house visitors like yours, and I have told them - nicely but firmly - that I work for the seller, we have published this procedure to all of the agents in the MLS, and that's the way we're going to handle things. Oh, and I don't write up offers for buyers, either.

Frankly, I think the real estate world would be a better place if we waited a week or so to collect and review offers. My goodness, they advertise the date of auctions, and nobody goes to the courthouse steps early, screaming "I want to get in before everybody else!"
0 votes Thank Flag Link Mon Apr 22, 2013
Chris, the most money is not necessarily the best deal for the seller.

The deadline for reviewing offers was most likely set and or suggested by the listing agent.

The asking price is not cast in stone it is a suggested price, but the market will dictate the value.
0 votes Thank Flag Link Sun Apr 21, 2013
Fair has nothing to do with real estate.

His response and your response were wrong.

If he submitted the offer to you, you are obligated to present it, the seller is not obligated to respond to it.

Your response should of been, I will submit your offer to the seller, I'm not sure the seller will respond as he wanted to review all offers after the open house.

That said, it could of been an offer that was all cash at or above asking price, no inspections, closing to meet sellers needs. The seller and you could of loved it.

Remember you always run the risk of not getting other offers and alienating an excellent buyer.
Each case is different and should be handled as such.

NJ and New York offers mean nothing, until they get a agreement from the attorney in our case the p&s - they get a better offer during the attorney review and they can take it,
0 votes Thank Flag Link Sun Apr 21, 2013
I did walk him through the fact that it was up to the seller to respond, Louis, and I encouraged him to write an offer regardless of how he felt about multiple offers. I know from ethics training about our obligations incident to presenting offers to the seller.

Thanks for your response!
Flag Sun Apr 21, 2013
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