The Leverage of Multiple Offers

Now this is certainly an enjoyable topic to write about.  The market in Fairfield County, Ct. is heating up and our properties are beginning to see multiple offers more frequently again.  With all the euphoria, however, it is critical that realtors remember their fiduciary responsibility to their clients.  Listing agents especially need to be mindful of  their obligation to use discretion and to protect their client’s equity.

Rules of Thumb

It is imperative that listing agents remember the code of ethics and adhere to the following guidelines:

1. Never reveal the presence of another offer without the consent of the homeowner.
2. Never disclose the specific number of offers without the consent of the homeowner.
3. Never disclose the terms of other offers without the consent of the homeowner.   This includes price, contingencies or closing dates.
4. Always do whatever you can to create a level playing field.  No potential buyer should be given a unique advantage over others.  Especially a buyer who is also represented by you the listing agent.
5. It is almost always in the best interest of the seller to ask each buyer to bring in their “highest and best” offer.
6. In any case, advise your client to the best of your ability, every step of the way.  Offer your opinion of the most prudent choice in each circumstance, but never force your opinion upon them.
7. Inform the agent of the buyer whom the homeowner decided to sell to first, before calling the others.  You want to do what you can to ensure that they still want the home before telling those who have lost out.  This can help to avoid  awkwardness moving forward.
8. Never tell the agent or buyer who did not have the most attractive bid what the specifics of the accepted offer are.  You never know, buyer number one could eventually back out of the deal.

Bonus:  If one of the offers that are not accepted want to be in a back-up position, encourage the seller to accept it, as long as it is a competitive offer.  In addition to providing security, back-up offers seem to be very effective in motivating the buyer of the accepted offer to meet their contingency dates.

Have you had to learn the  “hard way” in dealing with multiple offers?  What additional piece of advice would you give?

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