Since the Spring of last year (2017) we have been experiencing situations where a homes for sale have received multiple offers. What this means is exactly how it sounds; they receive more than one offer from multiple buyers….though what is not obvious is they all should be in writing; meaning no verbal offers should be construed as a serious offer. This is obviously good for sellers, but has proved to be very challenging for buyers, especially in the price point around the $200k mark. It should be noted though, it is not every house in this price point getting multiple offers as there are many factors to consider such as condition, location and functional obsolescence, such as having a bonus room where you have to go through a bedroom to enter. It should also be noted that higher price points also experience multiple offers, again, depending on certain factors. Real Estate has so many subjective matters that can create certain outcomes.
If you have been part of a “bidding war” aka, a multiple offer situation, you may have heard the term “highest and best”. This is where the listing agent will ask all buyer’s agents to have their buyers tell them their best terms in order to secure the house, getting it under contract.
What is now being suggested, which really does make sense is for agents to not use the term “highest and best offer”, but rather use the term “best offer”. This is because highest and best insinuates the highest offer will get the house, but there are several other terms in an offer that can swing a seller to accept an offer over another one. Those could be the amount of due diligence money or earnest money, the amount of time for due diligence, whether or not they are asking for seller paid closing costs, a home warranty, the type of financing, the list goes on.
So when it comes time to submit an offer your agent should be able to find out if there are other offers on the table and if there are, they should be able to cultivate a game plan on how to proceed. Remember, your agent can’t control the situation, but they should be able to help you understand what is happening and sometimes that is half of the battle.