The Multiple Offer Process

When homes are highly desirable and very well priced, more than one buyer may submit purchase offers for the seller’s consideration.

For this example we will assume that four buyers submit offers, however this number can range between two and ten, and in some cases may go even higher.

The following step-by-step outline describes the multiple offer process. Dates are used to provide a sense of elapsed time. An Excel spread sheet detailing the four offers can be viewed here.

January 5

Property listing is submitted to the Multiple Listing Service computer.

The seller and listing agent set a date when all offers will be reviewed. This way the seller is assured that the property has been vigorously marketed in the newspapers, on the Internet, on brokers caravan, and through direct networking, so that any buyer or agent looking for a house in this price range and in this neighborhood will have known about the property when the offers are reviewed.

Property is marketed and all agents and buyers are told that offers are due in to the listing agent’s office by January 17.

In many cases, instead of simply submitting the necessary paperwork, a buyer’s offer will be presented in person by the buyer’s agent – usually in the listing agent’s office. (It is to the buyer’s advantage to have their agent present the offer in person.) When there is more than one offer on a property, most real estate companies ask a Manager to be present when the buyers’ agents present their offers.
Each buyer’s agent gives the seller information on who the buyer is, their motivation for wanting the property (sometimes including a personal letter from the buyer to the seller), and the buyer’s offered price. The agent also attaches a summary of the terms of the offer along with a copy of the buyer’s pre-approval letter from the lender and sometimes a copy of the deposit check.

January 18. The listing agent and the seller review the four offers and issue what is called a Multiple Counter Offer Form. (See attached sample Counter Offer #1.) The seller will most likely counter all of the buyers’ offers unless they feel that one of the offers is so low that it makes no sense. (I recommend countering to all of the buyers; you never know if some of them will drop out at this point.)
Item #1 allows the seller to detail specific terms that must be agreed upon (or re-countered) by the buyer.

In some cases, the buyers’ offers may have included these terms; in other cases they will be new to the buyers or will adjust the exact terms offered by the buyers. Up to seven single-line terms can be included on Item #1; if the seller wishes to specify additional terms, the box is checked on Item #1D and an Addendum or other document is included with the Counter Offer. (See Addendum #1 here.)
On Item #3, the Multiple Counter Offer form specifies when all responses are due. For this example, the buyers are given 24 hours to respond and must either accept the seller’s Counter Offer or submit a further Counter Offer by January 19, 2007 at 12 noon.

Note that on Counter Offer #1, the seller has checked Item #4: MULTIPLE COUNTER OFFER. This means that the seller can counter all four offers on identical terms or on different terms and if all four buyers sign and accept the seller’s Counter, the seller has to re-sign the Counter Offer in order to make it binding. Item #4 also provides a place where the sellers let the buyers know when they will be responding. For this example, the date is January 22, 2007.

The seller signs on Item #5, which protects the seller and gives the seller the decision-making power regarding the ultimate buyer.

The buyers either accept the offer on Item #6 or counter back to the seller with Counter Offer #2. This is where the buyers should go all-out if they really want the condominium!

Where do you start?

Start by finding a real estate agent. In fact, all you have to do is e-mail or call me! We can talk about your needs, your priorities and your concerns and start looking for your new condo – today! Please contact me at Coco@WestsideLifestyles.com or 310-278-6033.