It’s happened – you’ve found your dream home and you want to make an offer.
The problem is, so does one or more other buyers.
So what happens when sellers receive multiple offers for a property?
The first thing to say is that no law in NSW states how multiple offers should be handled.
Whilst it’s good practice for agents to inform all their interested buyers that it’s a multiple offer situation and give them the chance to confirm their best and final offer before dealing with them, they have no obligation to do so.
Nor does an agent need to wait until everyone that’s indicated an interest in a property submits an offer. If you’re dragging your heels, you’re likely to miss out.
An agent’s obligation is to communicate offers as they’re received to their sellers, to act in their sellers’ best interests and on their instructions. How things move forward with the sale is up to the sellers.
As a buyer, you may not be aware of the seller’s circumstances, in fact, an agent may not always be 100% aware of the seller’s circumstances, nor will you know what other buyers are doing.
It may be that the seller receives another offer that they feel is too good to refuse that they decide to accept straight away – that may be disappointing, but it’s also the seller’s prerogative.
As a rule of thumb, most agents will go back to their buyers to allow them to submit their BEST and FINAL offer before they and the sellers begin dealing with them.
Once you’re in competition for a property you’ve lost the opportunity to negotiate one on one with the seller – you’re competing against the other buyers for the keys. And when multiple offers are presented, sellers will usually accept the highest offer or negotiate with the buyer with the best conditions. If you miss out on the property, it’s too late to increase or adjust your offer. The property is now Under Contract with another buyer.
So with all that said, here are some of our do’s and don’ts when you’re in a multiple offer situation.
- Ask questions. If you’re not sure about the process and how it works – ask the agent. They’re there to help. The only dumb question is the one that doesn’t get asked.
- When advised by an agent to confirm your best and final offer, make sure it’s that – the most that you’re willing to pay, or can afford to pay, to buy the home. Not your wiggle room price or the price you hope you hope to negotiate from. You’re only going to get one shot. Give it your genuine best one.
- Make your offer amount an odd amount rather than a $5000 or $10,000 number – you never know, that extra few thousand or even $500 or so might be what tips it in your favour.
- Offers aren’t just about the price, but also conditions. Make sure you’ve considered both when you’re in competition. Could you make your offer more competitive by reducing the number of conditions?
- Provide your agent with any details that will support the strength of your offer, such as details of your finance approval or the phone number of your broker so that the selling agent can confirm you’ve got your ducks in a row if you’re borrowing.
- Run your own race. Instead of tying yourself in knots about what other buyers are doing, focus on what YOU can afford and are genuinely prepared to pay.
- Overcomplicate your offer. Sellers want the easiest route to the result and sell to someone who seems easy to deal with. If you start adding extra conditions to your offer or give your agent a hard time, it will put you at a disadvantage when it comes to the seller deciding which way to go.
- Play games or expect the agent to be able to read your mind. If you’ve told your agent that you’ve made your best and final offer they will take you at your word. If you could have paid more and didn’t communicate that to the agent and subsequently miss out, it’s not the agent’s fault, it’s yours.
So if you find that dream home and there’s interest from multiple buyers, don’t muck around. Make sure you get in quick, put your best foot forward, and present your genuine BEST and FINAL offer. And if you miss out? Trust that it wasn’t meant to be and that the universe has something better in mind for you.