Multiple Offers for Buyers of Real Estate in Park City Utah

Navigating Multiple Offers as a Buyer

With the real estate market heating up we are starting to see a strong return of multiple offers on properties. The combination of less available inventory, and increased demand by a larger pool of active buyers is resulting in a re-emergence of multiple buyers bidding for a single property, which means multiple offer situations. As a buyer shopping for a home, what does this mean for you, and how can you best navigate through this process? You are hopefully working with a local Realtor® to assist and guide you, but even so, the more you know, the better you can make the important decisions when the time comes.

So after researching homes online and viewing possible properties you have finally found just the right home. You decide to write an offer, and upon doing so, the seller's agent informs you that there are now multiple offers on the home. What do you do next? The process of dealing with multiple offers will probably vary from one state to the next. Below we have information on how it generally works here in Park City Utah.

As the buyer, you will be presented with written notice from the seller stating that there are now multiple offers on the property. Usually the seller via the seller's agent will send you a "Seller's Notice to Buyers of Multiple Offers" if they plan on negotiating with the multiple buyers. The seller is going to attempt to get the best situation for themselves. They will not only want to secure the highest price, but they also will want the best terms and try to determine who might be the safest buyer to work with.

When in a multiple offer situation the seller has a few options to choose from.

1 - The seller can elect to accept or counter one of the offers and reject the others. The seller may decide to only respond to one buyer, and attempt to work out a deal with that buyer. If the seller has a few offers to consider, and one is much better in its terms and price, they may feel that is the best route to take. The seller is not obligated to respond to all buyers who present offers.

2 - The seller may decide to present multiple counteroffers. In this case the seller will deliver multiple counteroffers to the multiple buyers. Usually there will be a disclosure stating they are delivering multiple counteroffers. Even if multiple buyers "accept" the seller's counteroffer, the seller has final say of which "accepted" counteroffer they will ultimately go with.

3 - The seller may opt to provide all buyers an equal opportunity to present their "highest and best offer". This is the most common situation we see when multiple offers come up. In this situation the seller will inform all the buyers, and even potential buyers that there are now multiple offers on the property. They will generally give everyone a certain date or deadline to submit their final "highest and best" offer to the seller. This is usually viewed as the most fair, and best route to go with for both the seller and the buyers involved. It creates a very level playing field for all of the buyers.

As a buyer, it is important in an active market to submit an offer that has strength to it. A clean offer, with a good price has a much better chance of getting accepted by the seller. In an active market, submitting a low-ball price may not even get considered, and may get beat out by a competing offer without ever getting the chance to resubmit a new better offer. For buyers who will be using financing, it is very important to get pre-approved with a local lender and to include that loan pre-approval letter with your offer. This shows the seller you are capable of completing the purchase and responsible and serious enough to have that part of the process already complete.

Some buyers do not like the "highest and best" multiple offer situation because they feel like they are then in a bidding war, and do not want to overpay for the property. Our advice is if you are in a multiple offer situation and asked to submit a highest and best by a certain date, why not give it a try? To walk away simply gives the property to someone else. If you truly love the property, submit your best offer. Determine a price where if you get it, great, and if you lose out to another higher bidder, then you're Ok with that too.

What's Fair in Multiple Offers?

Buyers often get their feelings hurt and feel taken advantage of in multiple offer situations. But remember, what you think is "fair" is not always the most "fair" route for the Seller. For example, if you submit a low-ball test offer, and the seller chooses option 1 above and never communicates to you that there were other offers to compete against, you as the buyer might not see that as fair. But for the seller, they may not see it as fair to allow you a second chance when another buyer really stepped up to the plate and submitted a strong clean offer right from the start.

Real estate agents (especially Realtors®) on both sides of the transaction must act ethically when negotiating in a multiple offer situation. But don't overlook what is fair as the same as being ethical. What is ethical may not always seem fair to the other party. Multiple offer situations are very tricky, with both good and bad consequences and each situation is always different. If you are a buyer, and find yourself in a multiple offer situation, the best advice we can give is to engage your Realtor® and discuss all options carefully with them. While no one can fully predict the outcome, you'll at least know you gave it your best shot. If you get the property, great! If not, you'll be more prepared for the next one.