How To Navigate Multiple Offer Situations

With a limited number of houses on the market in Texas and throughout the country,  the competition is stiff when it comes to home buying. Many real estate agents and the sellers they represent are finding themselves caught in bidding wars. A bidding war is defined as: two or more parties competing for the purchase of a home. However, these days, it’s not uncommon to have numerous parties making an offer on a home above listing price, creating an “auction-like” feel. While this is a good problem to have, choosing between several offers can be tricky. As a real estate agent, you want to help clinch the very best deal for your clients whether they are the buyer or the seller. Here’s a few things to keep in mind when there are multiple offers on the table: 

Money Talks

A high offer above the asking price is always going to catch a seller’s attention. However, the highest bidder may not be the most qualified buyer. Before accepting the offer, the terms of the contract may have to be fine tuned. Cash offers (with proof of sufficient funds) are great because you don’t have to worry about whether the buyer will qualify for a mortgage. However, most buyers will require a mortgage and you’ll want to make sure they are pre-approved before moving forward. Some offers have a “home sale contingency” which means the buyer has to sell their current home in order to get approved for another mortgage. 

Sweetening The Deal

Some buyers may be so eager to purchase a property that they will offer to pay for some (or all) closing costs as a way to stand out above other offers. Some will even go as far as making an offer with an escalation clause by offering to outbid another bidder by a certain amount. When considering multiple offers that have similar price and contingency terms, these sweet little “extras” could help seal the deal.

No Time To Dilly-Dally

In such a competitive real estate market, there is not much time for indecisiveness on anyone’s part. According to texasrealestate.com, Texas homes were on the market an average of 48 days in January 2021, down from 68 days in January of 2020. That number is expected to continue going down. Real estate agents should counsel their clients to know what they want in advance so they can make offers quickly. That way, if the offer isn’t selected, both the buyer and the seller can move on just as quickly.  

Play Fair

As a real estate agent, it’s exciting when your client receives multiple offers on their property. However, one thing you and your client cannot do is to share the terms of one offer with just one buyer’s agent. Doing so could land you in hot water and jeopardize your real estate license. This gives an unfair advantage to one buyer over another and is against Texas Real Estate Commission (TREC) laws. To comply with TREC, all prospective buyers must be treated fairly.