How to handle multiple offers when selling your house
What are multiple offers and how can you negotiate to get most money and the best offer when you’re selling your house? That’s what we’re going to talk about in this video.
Hey guys! Welcome back. This is Eric Sztanyo with Keller Williams Realty and TeamSztanyo.com, where we are helping you build a bridge to your future real estate dreams. And, this channel is all about real estate in Cincinnati and Northern Kentucky for buyers, sellers and investors.
In this video, I want to talk a little bit about multiple offers, what they are, and making sure you are navigating the negotiation process to get not only the most money but the best offer. In this market (and we’ve talked about this in other videos) in NKY, Cincinnati and mostly across the country, you are seeing inventory down, buyers are up, and it’s a hot seller’s market.
We’ve been seeing that in Cincinnati for a while. So, if you go to list your home and if you have it priced right and in good condition, you have the potential to attract a lot of different buyers to your property. With a lot of different buyers, it could potentially bring multiple offers on your house.
Race to make the first offer
What you might see when your property is first listed is a lot of showings lined up in the first few hours or that first day. And with those showings, you may receive multiple offers.
Now, you want to make sure you are working with a good real estate agent on this because what may happen is when you have that first showing, they give an offer with a short acceptance period because they don’t want anyone else offering on the property. Why are they doing that? They are doing it because they don’t want any other competition. They don’t want anyone else to come in and put in a better offer.
That could be good or bad. You just need to navigate the waters. Let’s say you published the listing at 10am. You’re first showing is at noon, and you have your first offer by 1pm that day. Now, you also have 6-7 other showings lined up over the next few days, but you have an offer in hand, and they say the acceptance period is until 5pm. So, they want you to turn it around in 3-4 hours and say yes or no.
Getting into multiple offers
Well, in order to leverage that to your benefit, what you want to do is get back to that buyer and say, “thank you for your offer. We want to allow 24 hours for all offers to come in.” Now, a couple of things could happen from that scenario. First, it will give more time for other agents to come and show the property to potentially get more offers. Second, that first buyer may even raise their offer even before you get other offers because they don’t want anyone else in.
So, if you’re doing this right. You want to contact all of the agents who have lined up showings, and you want to tell them you have an offer in hand. Ask them to get their earlier with their buyer, and if they can’t, ask for the agent to preview the property and relay the information to the buyer to see if they want to make an offer or not.
Let’s say you’ve gone through that process to maximize the showings and now, let’s say, you have 3 offers in your hand. Now, you need to decide what is the best offer. So, you’re looking at price. Yes. You want the most money for your house, but you’re also looking at terms. So, you want to look at the financing options. It could be cash, conventional financing, FHA or VA loans, which could be harder to close. You want to look at the inspection period timeframe. You want to look at the amount of the earnest money deposit. Your real estate agent should be guiding you through the offers and helping you know which one is the best or strongest.
Now, you have 3 offers in your hand. You may go back to the agents and say, “thank you for these offers. we want you to submit your highest and best offer, and we’ll make a decision from there.” So, as a buyer, they don’t know how high to offer.
Now, that could work against you in a couple of ways. A buyer may now decide to get cold feet and feel that they already made too high of an offer. The other way it could go against you is if the price gets too high, it may not appraise for that amount. This could potentially derail the closing.
Let’s say your house is going to appraise for $250k, but the multiple offers went up to $280k. Now, that’s great that someone offered that much, but if the house doesn’t appraise for that amount, the buyer will not be able to get a loan for that much money. Now, you’ve kind of outbid the house and what it’s worth.
Getting the BEST offer and strongest buyer
Again, what you need is an experienced agent who will help navigate you through this process. You do want to try to get the most amount of money for your home. You want to be able to leverage a seller’s market and not just take the first offer and run with it, even though it may be tempting to do. There’s a little bit of risk involved in multiple offers and there’s no one formula to do it right every time, but if you’re working with an agent who knows what to look for in the offers. They are helping you weight the different elements of the offer and recommend what they think is the strongest offer – that may or may not be the highest price.
Ultimately, what you want is to sell your house and get to the closing table. So, you want to leverage multiple offers into a higher price, but also the strongest offer – the best buyer who is able to close.
So, that’s a bit of the market that’s out there in Cincinnati and NKY and across the country in terms of multiple offers.
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