Over the past few months a couple of my clients have been involved in multiple offer situations. Unfortunately for them they were the buyers and not the sellers. For a seller multiple offers on a property will most likely result in the selling price being higher than the asking price. When a buyer enters into a situation where the property they want has multiple offers, the buyer then has to decide how much that home is worth to them knowing that it will likely sell for over asking price.
Keep in mind that the seller does not have to accept the highest offer. They may choose a lower priced offer that doesn’t have any conditions attached, such as a home inspection or financing condition. Any condition gives the buyer a chance to back out of the deal if they are not satisfied. Make sure your financing is in place with a pre-approval from a lender, before you submit an offer.
Multiple offers are generally unfair to buyers, and buyers must be properly educated in advance by their agent. Your agent should give you an indication of how much the property is worth based on recent sales in the area. Can the seller supply you with a property condition statement or a home inspection report? If not that may indicate physical defects in the home and therefore a home inspection is a must.
When there are multiple offers on the same property, buyers must be careful to only offer what they can afford. Listen to your agent who understands the bidding process and can offer you objective advice.
If you are a seller in a multiple offers situation, remember that the more you disclose the more offers you’ll probably receive.