Here in the North Shore suburbs of Chicago, spring is usually the busiest season for the real estate market. However, COVID-19 has changed the selling season drastically. Now, we are experiencing a high level of sales activity all year long. We have many more buyers for fewer available homes for sale. That means an increase of multiple offers for desirable properties.
If you are in the enviable position of dealing with multiple offers as a seller, handling the situation thoughtfully can make all the difference. Because of this, an experienced broker is extremely important to guide you through the process. Here are a few tips on how best to handle this.
Make a Game Plan
Before you go on the market, talk to your broker about your real estate goals (I.e., pricing expectations, your timing needs), the process from now through closing, and your options if you were to get multiple offers.
There are several different choices for handling multiple offers, and potential legal ramifications if not handled correctly. Be sure to consult your broker to make sure you understand your options, so you can make the best decision for your situation.
Think More Than the Price
It is tempting to accept the highest bid, but the highest-priced offer is not always the best offer to achieve your goals. Remember that once an offer is accepted, there are more many more steps to complete to successfully close the transaction.
Every seller has unique goals, so factors like finance contingencies, sales contingencies, and a closing date may be as or more important than the offer price. In addition, you should take the appraisal of your home into consideration if you choose the highest-priced offer. Some buyers will bid above list price and possibly above market value just to “win.” But if the appraisal comes in at a price lower than the offer, the buyer may have no choice but to cancel the contract or ask you to reduce the purchase price.
Respond to offers in a timely manner –within an hour if possible, for each interchange. Once the terms are to your liking, be sure to sign the contract right away. The longer a negotiation drags on, the more tenuous it becomes. If you “sleep on it” or wait a day or so to sign an offer, the buyers may become suspicious, lose interest, second guess their decision, or move to another property and rescind their offer.
Maintain Your Goals
Multiple offers can be stressful for all parties in the transaction, so it is important to be clear-headed and stick to your objectives. For example, if you want a quick closing, keep that in mind when evaluating any offer you receive. There are often elevated levels of emotion during the negotiation of multiple offers, so try not to get caught up in those emotions.
While you likely have the leverage in negotiations, you always want to keep a buyer engaged and avoid ultimatums. Buyers are generally more likely to walk away from a negotiation when they feel as though they have lost control or they suspect unethical behavior. Whether it is happening or not; perception is reality.
While the goal is to get you the best possible price and terms for your home, not losing your buyers and successfully closing should be just as important.
The featured photo is of a home sold by Marissa Hopkins at 991 Harvard, Highland Park.
Written by @properties; Modified by Marissa Hopkins, Broker