Saturday, June 07, 2008

Multiple Offers: To Engage or Not to Engage, the Answer is up to You!

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I recently came across an interesting discussion among peers regarding the dynamics between buyers, sellers, and their agents and whether a buyer's offer is kept secret when presented to a seller and his or her agent. While the discussion was technically not about multiple offers, the discussion evolved to include this subject because the original post mentioned some of the things a seller's agent might do when there are multiple offers on a home; for example, when the author said, "Often the seller will counter the most qualified buyer with the higher price of another offer from a less qualified buyer. Technically they didn’t 'reveal' your 'offer,' but they used your price as the counter price to a different buyer."

These are the kinds of things that buyers need to be aware of before deciding to engage in a multiple offer scenario because ultimately the goal of a situation like this is to get the highest price possible for property. Depending on the situation, and the people involved, this scenario often leads to compromising the strength of a buyer's negotiating position. A good buyer's agent should work to shield, inform, and protect a buyer's negotiating position because through this strength a buyer has the best chance of negotiating the best deal possible. A compromised negotiating position means that a buyer has lost all of his or her bargaining chips and must now deal on the seller's terms if he or she wants to pursue that seller's property. Some agents might argue that some homes are worth pursuing in a multiple offer situation, but the decision of "worth" is ultimately the buyer's to make once they fully understand the rules of engagement because a situation like this truly falls under the seller's rule. Instead of negotiations, the transaction will seem more like an auction and the multiple buyers involved become levers in the seller agent's quest to get the highest selling price possible for their seller. In my opinion, buyers should not oblige, but it is up to the buyer whether or not they wish to engage.

A multiple offer situation is the best possible scenario for a seller, period. Indeed, it is quite the opposite for a buyer. Even under the advice of a buyer's agent of whether or not to engage in a multiple offer situation, the choice to engage is still the buyer's decision to make.

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