This past week has been a busy one around the office, with several of our listings facing multiple offer situations. Many of our agents’ buyers were facing them from the other side of the coin. This time of year, real estate activity typically picks up in San Antonio, but this past week seemed to be especially hot. Is this an indication for the year or just a relatively good week? Only time will tell, but let’s talk a bit about multiple offers.
Multiple offers are exactly that, when several buyers make an offer on your home and you’re sitting in front of two or more of them trying to make a decision on how to move forward – counter them, take one, or take none. Anything is possible in this situation, but typically, your agent will advise all of the buyers’ agents that we are in a multiple offer situation and to make their highest and best offers. By asking for highest and best, your real estate agent is signaling to all the other agents that we’re ready to choose one, so you better be sure your client is making the best possible offer for them.
Once the call for highest and best goes out, agents will get with their clients and usually write out a new offer, this one being the best they can possibly do. Once your agent has gathered all of those, they will present you with all the offers and show you which ones have which advantages and disadvantages.
Weighing Multiple Offers
There’s a lot to consider when looking at multiple offers. The first thing is to not pick the offer to accept based solely on price. If you’re selling your home for $150,000 and you have two offers; one for $150,000 and one for $155,000 – seems easy enough right? The higher price is alluring, but it’s the details of the offer that matter most now. Because buyers can ask sellers to pay for different items or ask for closing cost concessions each offer needs to be weighed by the bottom line – which offer is going to give you the most money and accomplish your goals in the time frame you need. A cash offer at a lower bottom line might be ideal for you if you want to move out of your home quicker. These are the nuances that you and your agent will be discussing.
The great thing about multiple offers is that they will often push the price of the home somewhat higher than the original price it was listed at. This is not guaranteed, but it is definitely common. Some sellers will then ask “did we price the home too low” and worry that perhaps they should have set a different listing price. The key here is to remember that the goal was to sell your home for the most possible. Based on your real estate agent’s research into the market a list price was agreed upon. At any given moment however, the market is in flux (both up and down) and the true picture of the market value of a home is what a buyer is willing to pay for it. We must base our pricing on historical trends (recent sales), but buyers can push that price higher or lower if they decide – supply and demand. In the case of multiple offers, you have a high demand for a limited item (there’s only one house). This can push the price higher than its value because of the desire of one buyer over another to get what they want.
image courtesy of Luca Biada