Multiple Offer Situations

Question: We recently put a bid on a home. Our Real estate agent told us that we had to sign a multiple offer form and that we should increase our offer if we have any chance of getting this home. We did not increase our offer and we did not get the home. I am still confused about this. Could you explain?

 

Answer:  It is normal practice for a Realtor to inform all buyers in writing, that this is a multiple offer situation. It notifies the buyers that they are up against other offers. This notice usually has a final date & time, by which any buyer may change their offer and let the seller know their intentions. In other words, a buyer who really wants this home may increase their initial offer in hopes that this higher offer will be chosen by the seller. Keep in mind that sellers look at more than just the price. Financing terms, possession, etc, may also be important to them.

Example: a seller may want to take a cash offer that is lower in price, rather than take a higher offer from a buyer who must obtain financing.

The Realtor goes over with the seller, the positives and negatives of each offer.     The seller then chooses to accept or negotiate with one of these offers.

A buyer does NOT have to change an offer just because of a multiple offer situation. They may let the seller know that the original offer stands.

That being said, experience has shown us that in most cases, buyers will increase the initial offer for that home if the increase is still acceptable to their budget and loan qualification status. This increases the chances of their offer being accepted by the seller.  Multiple offers are a big benefit to sellers for obvious reasons.

Your Realtor felt that if you wanted this home, you needed to increase your offer. The Realtor was your consultant. The final decision was yours to make.