Multiple offer situations have many pros and cons. While they can cause stress for buyers, they can be an exciting moment for sellers. As with anything, it’s all about how you see it! Here’s how we see it.
The pros and cons of a multiple offer situation for the buyer
You can build the offer that works best for you.
We know it can feel discouraging if other offers are on the table for either at asking, or above asking price. But this doesn’t always mean the deal is done. There are lots of reasons that your offer could be the one, so lead with your best and final offer.
There are solutions that exist to help you.
Solutions, like Ribbon, can strengthen your offer by turning it into all-cash, so that you stand out as the obvious pick.
You picked well!
There is a reason this home is so desirable—whether that be the location or the amenities. Take comfort in the fact that you have a great eye.
You have to move quickly.
When multiple offers are on the table, it’s important to ask the selling agent if there is a cut off date and time for submitting. This will inform how quickly you need to move and help you stay organized because you’ll have less time to think through your options.
It can be stressful
This is the honest truth. More buyers, more likely you may lose the house. Emotions run high and it can feel very tense. Try to stay even keeled and honest with yourself. If you’re in a particularly hot market, this experience may happen more than once. It’s good to take as much personal emotion out of it as you can.
You may have less notigating power downstream
When you have to put it all on the line in a multiple buyer situation, you may have to make concessions. For example, you may end up covering a cost you didn’t expect. It also means that your negotiating power further into the process will be diminished. All the more reason to give your best and final offer upfront!
The pros and cons of a multiple offer situation for the seller
The world is your oyster!
Congrats! you have multiple offers to choose from. Double congrats! It means you have a super desirable house. You’ve got a good eye.
You hold the power
With multiple offers, you can ensure that you sell your home on your terms—whether that be the easiest sale, the biggest offer, or even just the nicest family. Do what is most comfortable for you.
You have a safety net
Should the offer you have chosen fall through, you have a few potential buyers you can reach back out to.
Beware the appraisal issue
If you sell well over market value you may run into an appraisal issue. Appraisals are the closest estimate to the actual value of the home of a home and will help to determine financing. If these are not aligned, banks may not offer the full loan amount needed.
You may scare potential buyers
Not all buyers are interested in entering into a situation in which other offers are on the table. This is especially true if the buyers are looking slightly out of their ideal price range.
Keep an eye on your bridges
When picking an offer, you want to ensure you don’t burn any bridges. Buying a home can be very emotional, so buyers and their agents may react in ways you don’t expect when told that you’ve moved in another direction.
The pros and cons of a multiple offer situation for the buying agent
You can (gently) push your client to make a choice
With multiple offers on the table, you have more footing to entice your buyers to make a definitive choice in a timely manner—hopefully resulting in them writing their very best offer.
It’s time for your expertise to shine
As the market expert, your clients will rely on you to help them make a choice and to have the tools (like Ribbon!) to make the offer that wins it all.
Oh boy, is your buyer feeling a lot of feelings
Multiple offer situations can be very stressful and tense. If they win the home, there is instant relief. However should they not, buyers sometimes will become so upset that they will terminate their search all together to take some time to recover. Depending on how the relationship has gone so far, they may search for another agent.
If your offer doesn’t win, you’re back to the drawing board
This means you spent time, money, energy and resources to help these buyers, but aren’t getting paid...YET.
The pros and cons of a multiple offer situation for the listing agent
Oh boy, is your seller happy
Look at you go, you market expert!
You do not have to negotiate price reductions
On the selling side, convincing your client to okay a price reduction can be difficult, as it is understandably upsetting. On the buying side, it doesn’t always look great to see price reductions and long amounts of time on the market. Luckily, you don’t need to worry about it!
Less stress for sellers who are also buying
Since many mortgages require that a buyer sell their current home before closing on a new home, this is an ideal situation.
Your seller may worry you priced too low
No one wants to feel like their beautiful home is seen as a bargain—especially if they could be making more to use on their new home.
It may scare your seller to move so quickly
If your seller was not totally ready to begin receiving offers, it can shock them how fast it can happen. This is especially true if they are getting multiple offers at once that they need to balance. Change is scary!
There is still a chance the buyer can back out, unless they used Ribbon
Most traditional home buying experiences are not guaranteed. However, when Ribbon turns a buyers offer into all cash, it’s guaranteed. Get in front of buyers who are pre-approved and ready to find their dream home. To learn more about how Ribbon can help in multiple offer situations, head to Ribbonhome.com or book a complimentary consultation, now.
Written by Mackenzie Krivant