Multiple Offer Situations
You have found the house that you want, however, it seems that everyone else wants it as well!
You submit your offer to the Agent, and you are told that the Agent has other offers and the Seller has instructed the Agent to make it a multiple offer situation.
What does this mean for you?
The Agent will advise you that they have received multiple offers for the property. The Agent will get you to sign a form to confirm that you have been advised that the Agent has received multiple offers for the property, that you should submit your highest and best offer and that you may not have another opportunity to make another offer.
The Agent will then give you an opportunity to amend your offer if you wish to. It is important to note that you do not have to change your offer if you do not wish to change your offer.
What is very important to consider whether you amend your offer or not, is that in a multiple offer situation, you lose the opportunity to negotiate. The offers are presented to the Seller and the Seller will choose which offer to proceed with. You should always present your highest and best offer in multiple offer situations. If you do not present your highest and best offer, you leave yourself open to losing the property to someone else.
When considering your amended offer, you should consider your offer as a whole. It is not always the offer for the most money which is accepted.
Offers that are more attractive to Sellers are:
- Cash offers (not subject to finance);
- Offers with a significant deposit (up to 10% of purchase price);
- Offers that contain the least conditions;
- Offers that settle quicker than other offers.
This is not suggesting that you should make your amended offer an unconditional offer. You should always consider what are the best terms you can offer in your circumstances, as well as what is the best price that you can offer. If you are unsure of what offer you want to put forward, you should seek legal advice about what offer to make.
The Agent will provide you with a time frame in which to submit your amended offer. You should comply with that time frame, as if you do not comply with the time frame the Seller may choose to deal with the offers that they have received within the time frame and not consider your offer.
It is very important to remember that the agent can not disclose your offer to the other buyers and cannot disclose the other buyers offers to you.
In terms of presenting the offers to the Seller, sometimes the Agent may proceed with a written offer form or sometimes they may get all parties who make an offer to sign a contract which contain the terms of their offer. This decision is made by the Seller and communicated to the Buyers by the Agent.
Once the Agent has all the offers within the time nominated by the Seller, the Agent will then present all the offers to the Seller. The Agent will go through all the offers with the Sellers and set out the advantages and disadvantages of each of the offers. The Agent will then give the Seller some time to consider all the offers.
Depending on the offers and the Seller’s situation, the Seller’s decision might be a quick decision, or they may take a day or two to consider all the offers.
Once they Seller decides which offer to proceed with, the Seller with either sign the contract if prepared, or the Agent will prepare the contract for signing.
After this the Agent will notify all the Buyers whether they were successful or not.
If it a difficult situation for all involved, however, there can only be one winner. This may not be the end of the story for unsuccessful buyers, and they can request to be informed of the progress of the contract, as sometimes contracts can be terminated and they might be the next cab of the rank, for the Agent to contact for possibly a new contract.
