A seller’s guide to multiple-offer negotiations
If you’ve got multiple offers on the table for your home, it must feel like a dream come true. And why shouldn’t it? Every seller desires the best price for their home. Even so, there are certain mistakes you should steer clear of while navigating multiple-offer negotiations.
Pricing your home too low can backfire, whereas pricing it too high can scare off the homebuyers. Dealing with multiple-offer negotiations doesn’t mean you hold all the cards. You need to tread carefully to close the best deal among the multiple offers.
Narrow it down to the top four offers
If the market (and luck) is in your favor, you might have 5 to 10 offers on your house. The beauty of this situation is that you now have the ability to choose. Start by vetting each offer and narrowing those down to three or four offers.
Contact the buyers who made those offers and finalize the best among them. That said, if none of the offers come through, you can give the fifth, sixth, or seventh a try. (You get the idea!)
But which is the best offer?
So…you’ve narrowed down your top four choices. How do you actually go about selecting the best among them? Often, sellers close the deal based on the highest price. But ideally, you should choose a buyer who is most likely to complete the purchase.
For example, it’s not uncommon for the highest bidder to back out of a deal in the first 20 days. And on top of that, the other buyers you previously rejected may be in the process of buying other properties by that time. Your real estate agent is the best person to advise you on which buyer is likely to go through with the purchase.
Even though they cannot guarantee the buyer’s behavior, their expertise and experience will come in handy for you.
You should also look at other selection criteria:
- Rent-back periods (where the buyer rents your property to you for a specified period)
- Waiving appraisals
- Inspection concessions
- Ideal close dates
A buyer who allows you to hold onto maximum equity and makes the entire transition easy should be the one.
Wait through the first weekend
When dealing with multiple-offer negotiations, sellers may feel tempted to latch onto the first over-list-price offer. But in favorable market conditions, you should wait beyond the first weekend, as chances are you’ll end up with many more offers that are above your list price.
Don’t feel intimidated by an initial offer’s early expiration. A buyer’s agent does not want competition because it’s their job to close the deal for the buyer. Remember: you’re in no rush to close a sale before the first weekend.
Be vigilant about ‘bully offers’
During multiple-offer negotiations, a buyer may know that you have many offers on your home and therefore throw out the biggest number. During the escrow, they may try to renegotiate everything to get you to agree to their terms and conditions.
Such offers are called ‘bully offers’ in the real estate realm. If you don’t have experience selling homes, you should hire a listing agent who can differentiate between an excited buyer and a bully offer.
Follow the above guide, and you’ll be able to sail through multiple-offer negotiations!