HANDLING MULTIPLE OFFERS

If you are lucky in any market you may get more than one offer on your Michigan Home. So, what is the correct and ethical way for you and the listing associate to handle multiple offers? Here is some advice. 
If you are fortunate enough to receive multiple offers, make sure to review each one carefully. If one offer is significantly better because of less contingencies, or stronger financing, or one offer has fewer conditions you may want to try work with that buyer first. After reviewing the terms of the offers - and discussing them with your agent - you can submit a counter-offer to one of the parties.

Multiple offers can be confusing.  And in the real estate business, confusion can be costly.   You do not want to lose all the buyers..

Tip no 1.  Is to compare all offers to offers.  The main areas to consider are
A.) Net price  What you will walk away with from each offer.  What does the buyer want you to pay for? closing costs, home warranty
B.) Contingencies  Obviously is one is contingent on selling their home and the other offers do not have that contingency then that offer is not as good as the others.
C.) Conditions.  What additional conditions do they want.  When do they want to move in?  Does it fit with your plans of moving? Do they want the stove and refrigerator?  That Affects net price also.  You will have to buy a new one.  Deduct that from the offer price.
D.) Financing.  Somebody that is putting 20% down with good credit is better than somebody looking for 100% financing.  A buyer that puts down a sizeable deposit or earnest money shows that they are really interested in the home.

Strategy No. 1 Set a deadline

Using this strategy, the seller does not counter any offer. Instead, the sellers agent calls the buyer's agents.  They are informed there multiple offers and are given a deadline by which they are asked to submit their best offer.   Then all offers will be looked at together.

The downside is that some buyers will not want to get into a bidding war and back out and, the upside is that the seller could receive an offer higher than the original listing price.   You may recieve less contingencies, less conditions, and less requests for personal property.  That´s because, in this strategy, the seller is not setting a specified price, just a specified time limit.

Obviously, if none of the offers is acceptable to the seller, the property would remain on the market.

Strategy No.2 Pick one offer and negotiate it out.

This simply means selecting one offer after comparing them and negotiating it to its eventual conclusion. The end result will be either an accepted offer resulting in a contract or failed negotiations. Should the negotiations fail, the seller moves on to negotiate with a buyer who has made another offer.  The problem with this strategy is that the other buyers may not wait around while your seller negotiates with only one offer.   the other issue is that if you go to the second buyer then they know there is no other offer.  The up side of this strategy is that it´s the simplest and least confusing scenario for the seller and Realtor.

Strategy No. 3  Everybody bids.

There are many ways to handle this strategy. One of the more common would be to advise all buyers that their offers are unacceptable at this time and that other offers are on the table.

All negotiations are handled verbally. As each buyer raises his or her offer, the others are given the chance to go higher. Prior to the seller´s making his or her final decision, each buyer is given one more chance to make a final offer.

As in Strategy No. 1, the upside is that the seller may receive more than the listing price. However, the downside with this approach is that the buyers are truly in a bidding war and may drop out earlier because they fear overpaying for the property. Also, as stated before, all verbal agreements are not enforceable.

Good luck on your negotiations on your Wayne County home, or Oakland County home or Livingston County home