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Marian Arcen…, Real Estate Pro in Los Angeles, CA

How should you handle multiple counter offers with multiple offers?

Asked by Marian Arceneaux, Los Angeles, CA Sun Apr 17, 2011

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Oh Sergio in Florida,
Presumed and no disclosure required Transactional brokerage in FL means the listing agent is prohibited from advocating for the seller to level of agency representation at the expense of any buyer, so you probably have to support the transaction, not promote the interests of the seller over the interests of every possible buyer. FL is goofy in that way. FL Default position is transactional brokerage, no discussion or disclosure abbout agency needed since it is presumed the public understands agency. Yea, right, a buyer understands the difference between TB and exclusive agency, I don't think so.
1 vote Thank Flag Link Wed Apr 20, 2011
Generally speaking I advise my seller clients that while having a multiple offer is good, there is no reason to out of the box announce it to every person with a written offer and one in the wings asking for disclosures that it is a multiple offer situation. You don't have to tell the same information to each buyer. NAR says treat all parties homestly, NOT equally or fairly...You get one offer today, good except for price, get another offer tommorow that has a home close contingency, at the same to you have two other agents asking for disclosures and feeling the listing agent out for preferred closing date. What do you do? Authorization from seller, Me, I tell every one that hasnt written it up yet to do it fast, we are in early negotiations with an offer. First offer see how buyer responds to seller counter and not mention 2nd offer in hand but that other agents are asking for disclosures and had two other 3rd showings. Day late written offer with contingency, That would be the only one I would advise is a multiple offer to get them to drop the contingency and get that offer in the same price range and first offer. Result, buyer one isnt going to spaz and run from a bidding war. Buyer two might back out or be willing to be a backup offer, The pre written offers come in stronger and you have a stronger alternative to buyer #1.
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1 vote Thank Flag Link Wed Apr 20, 2011
Not to be slick here, but I don't inderstand the concern for selling the house twice. In Illinois we have an attorney review period where either party has the right of recision for one week after acceptance. Maybe in CA you don't have that language in your standard contract, but in IL an attorney can write the other attorney correspondence and indicate he rejects the offer in its entirity without reason. This allows the seller to accept a subsequent offer better than first, or the buyer to bail out and buy a different house if they havve a change of heart.
1 vote Thank Flag Link Tue Apr 19, 2011
Discuss the situation with the owner of the property.

Suggest telling each person making an offer that they are in a multiple offer situation and they should come in with their best offer.

Have the owner select the best offer and accept it, or counter it.
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0 votes Thank Flag Link Tue Apr 19, 2011
Well - before you start to "handle" them - jump up and down - hug the sellers, and do a happy dance for being so lucky as to HAVE multiple offers in the first place !!!!!!!!!!!!!!

Hopefully, you discussed the possiblity of multiple offers in the sellers are prepared. Hopefully, you have explained to them what the best procedure would be, based on business decisions and not emotion.

In order tokeep this from turning into a circus.. one can alwasy try to ask for highest and best by a certain time frame...............however, depending on your state laws, there is always the chance that higher offers can come in after that time period, .and the seller might have the legal right (as they do in NJ) to hear and/or accept a better offer.
Each situation can play put differently - you have to be prepared to roll with it , and always make the seller aware of their legal rights.
0 votes Thank Flag Link Tue Apr 19, 2011
Hi John:

In California we don't have such a clause, the sellers are able to counter multiple offers but once the buyers agree to the counter then an seller chooses which offer he is going to go forward with and responds giving that one buyer confirmation. That buyer has a 17 day period to check out the property and make sure he wants to go forward with out any real consequence to the buyer (other than the possible cost of a home inspection and an appraisal)>

We actually don't have lawyers getting involved unless there is legal action brought against the buyer or seller. We tell our sellers to seek the advice of a lawyer if they have any questions, but most of them don’t. Our office offers the benefit of speaking to a lawyer as part of the listing agreement for a reduced price, which is really helpful because most people don’t talk to a lawyer until there is a problem rather than finding out if their could be one.

I find it fascinating how each state practices the sale of real estate.

Diana 909-560-0145
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0 votes Thank Flag Link Tue Apr 19, 2011
Multiple Counter offers can be challenging and a lot of work. Remember that your client, the seller makes the decision, usually on the information that you provide them. If it is a standard sale it might be handled differently than a short sale. You want to make sure that you have all of the correct information and current information on the buyers and that you have spoken to their lenders to see how far they are in the loan process.

Remember that some buyers don’t always provide you with the highest and best offer up front, so you can counter that way. You can also counter a specific price. If the buyers are offering more than you believe it will appraise for make sure that your remove the appraisal contingency and verify that the buyer will have enough money to bring into escrow to close the deal if it goes above what it will appraise for.

Some sellers would prefer cash offers even if they are a little less because they don’t have to wait for the buyers’ loan. (Again make sure you verify their ability to purchase with the cash they have on hand.).

Different types of loans may be more appealing than other according to the condition of the property. You need to be working with a knowledgeable lender who can help you identify if the property will have any challenges on qualifying for a loan. (Yes the property has to qualify as well as the buyer).

If it is a short sale, be very careful about accepting an offer over the estimated appraised price, if that buyer walks it might be difficult to get another buyer at that price and now you have set an expectation that might not be attainable for the short sale lender approval.

Make sure you understand how multiple counters work with in the contract so that you don’t make your seller liable to sale the property to more than one buyer.

You do not have to counter the offers the same, you can counter each one differently according to what works best for your seller. Just remember that it is ultimately your sellers’ decision, prepare net sheets on each offer and explain the advantages, dis advantages and pitfalls of each offer.

Good Luck
Diana Margala 909-560-0145
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0 votes Thank Flag Link Mon Apr 18, 2011
Hi, You should sit with the seller and discuss which offer best suites their wants and needs. Then if that doesn't work go "highest and best" with a deadline and go from there.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
0 votes Thank Flag Link Mon Apr 18, 2011
WOW surprised no one here said to follow the direction of the seller. Unless you are a transactional brokerage agent, the client makes the decision based on our input based on the price and non price factors that make an offer. Typically one offer comes in at a time and you don't have synchronized offers and to give the lessor offer priority just because it is first makes no sense. The worst case scenario for your seller is not that you have two offers accepted, but that one walks because they don't want to get in a bidding war and the other gets ridiculous in home inspection. NAR is very clear, we have to treat all parties honestly NOT fairly... If buyer number one is fine and a 2nd offer comes in why tell buyer one about a lessor offer? Not in seller's interest. If the 2nd offer is better than the first, tell the first offer hey we have a non contingent offer coming in, drop your contingency if you want to be competitive and not let buyer two know. If a three way offer, then use multiple offer notification form and ask all parties for final and best. It is not in your clients best interest to disclose the presence of another offer to a subsequent buyer. Out the gate to say to agents "I am not at liberty to discuss the presence of other offers"...

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0 votes Thank Flag Link Mon Apr 18, 2011
There would appear to be an easier way.
The owner of record should accept one offer or counter the best offer that was presented. On the counter, give the buyer 24 hours to respond or you can move to the 2nd best offer.
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0 votes Thank Flag Link Mon Apr 18, 2011
In California on the C.A.R. contract there is a box you check to let the buyers know that this is a Multiple Counter Offer. And it is not ratified until the Seller accepts one of them when it is returned.
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0 votes Thank Flag Link Sun Apr 17, 2011
First of all, you want to make sure that you don't sell the house more than once. When I have multiple offers, I urge my client to work with one offer until it is worked out and if it doesn't work out, to go on to the next best offer. As long as the Buyer and their agent are in agreement, you can accept a third offer as a back-up, but it should be contingent upon the release of the existing contract that the seller has with a third party within a specific time frame. You never know when a buyer is going to get cold feet or the inspections do not turn out to their liking. Multiple offers are a good thing, especially in this economy.
0 votes Thank Flag Link Sun Apr 17, 2011
If this is a standard sale there is a Multiple Counter offer section ON the CA Counter offer form.

OR you can choose what your seller deems to be the highest & best offer & just counter that buyer & tell the other people offering that you're countering 1 offer right now, but will hold the others as a back up & that you'll have a more solid answer for them in a few days.
562-430-3053 cell
Realtor Since 1996
0 votes Thank Flag Link Sun Apr 17, 2011
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