Posts Tagged ‘multiple offers’

Understanding Buying A Home With Multiple Offers

Sunday, February 27th, 2011

The homeowner that receives multiple offers may use the situation to play on people’s feelings and natural competitiveness, so it is very vital that a prospective purchaser keep a cool head and not allow such tactics to influence their thinking. And it is not only the homeowners, real estate agents can as well use deceptive tactics to increase closure statistics as well as their commissions. Certainly there are established codes of conduct that deal with these situations, however they are not always honored — so all involved has to stay focused and alert for indications of foul play.

Unethical tactics involving multiple bid scenarios are so prevalent that some provinces have decided to make it illegal for the seller to market a price they are not willing to accept in an effort to start a bidding war. There are specific rules of engagement regarding multiple bids that require non-disclosure of details while stipulating that any changes to the bidding process have to be reported to all parties before executing. However in the search to finagle a larger bid, many times proprietary information is deliberately revealed or even distorted to motivate the potential bidders. Even though such circumstances are more the norm in larger cities even Barrie real estate listings are beginning to witness these things happen.

The best plan when a buyer is handling a multiple bid situation is to put forth the best offer they are able to and put the least number of stipulations and conditions as possible into the offer so the seller will be drawn to it by straightforwardness and, if all goes well, the amount of the offer. The tendency of buyers to get caught up in the heat of the moment and make extravagant offers is exactly the kind of situation that could be effortlessly exploited by turning down a very good offer to try and get more money from the buyer. By taking advantage of a few homes for sale in a small area like Alton Village homeowners may try to to drive up the price.

Negotiating tactics often incorporate an agreement between the seller and their real estate professional not to divulge that there are multiple offers, and purchasers in these situations are not even aware that there is competition for their offer. This is not the norm, however, since the majority of homeowners are very interested in allowing all their prospects know that other offers are on the table, however they have to be sure not to allow any confidential information to become public and influence the bidding. Realtors have been known to shop around by making it known that the first offer has been made on a property to generate interest with other agents whose clients have an eye on the home. In less dynamic markets such as Windsor real estate listings it is perfectly reasonable as sellers want the maximum dollar amount from their properties.

A further underhanded strategy used to mislead potential purchasers, as well as hardworking agents, is to look at offers that are not going to be accepted in an effort to force the other purchasers into a bidding war. Some homeowners even begin with a very low price in hopes of creating a frenzy that will generate bids so high they actually exceed the value of the home. In the end, such methods harm all parties involved since when news gets out, especially with Realtors, that a homeowner cannot be trusted to honestly negotiate a deal, agents stop showing their properties.