Multiple Offers Strategies – The Seller Edition
It is a new phenomenon of late to have multiple offers on the home. The days on market (time on the market homes spend) has significantly decreased from 13 months in 2010 to 1 to 2 months in 2015. Life is not the same and now sellers are dealing with their homes being courted.
There are different strategies to take with a multiple offer situation… So how do sellers deal with multiple offers on their home?
- Handling the Situation:
- Highest and Best Scenario: Yes, this can get you the highest offer out there but, there isn’t a way to know if the buyer really has the money because they may be just “winning” the property by putting in a very high bid. Highest and Best does not necessarily mean just highest. The most important component of highest and best is ensuring that you have a buyer who is going to come to the closing.
- Primary Buyer and Back-Up Offers: Here a seller establishes a primary buyer and offers a counter that suits the seller’s needs. If the primary buyer does not take the counter, the seller has back up offers to ensure a contract will be established.
- Insuring the Best: Because of how contracts are handled, there isn’t a clear cut knowledge that a buyer is going to perform. Everything is based on “Good Faith”. So what can you do as a seller to insure the best situation? Remove remedies from mucking up the process unless they are related to health, safety, or structural issues of the home. This insures small items like repainting trim, leaky faucets, wobbly toilets, etc. are not going to be brought up as issues.
- Offer money instead of doing repairs: Know how much you are willing to pay and pay for the work to be done with the process. Let the new buyer handle coordinating the contractors. Less disruption for you.
- Cash: If the buyer is offering a price that is too good to be true, or cash, make sure you require proof of funds and a larger than usual earnest money deposit. It is security for the seller.
Multiple offers don’t just happen. The environment must be right. The multiple offers environment needs to include:
- Low inventory
- Homes that are priced well
- A well presented home.