If you have been around the Denver market in the last 30 days, you know it’s a seller’s market in the lower price range. This may be music to your ears if you are selling your home, say for around $400,000 in Highlands Ranch. You may also be thinking that all you need to do is to stick a sign in the yard and you’ll have multiple offers. Also, you may think that you don’t need a realtor to do any of this since it sounds so easy. The last part is where you have gone off the rails.
You see, the multiple offer scenario is one of the toughest deals to handle in real estate. First, the real estate commission mandates that you treat all the consumers fairly and that you create a level playing field. For instance, letting someone in to see your home before you advertised showings to start on a specific date would be a no, no. Or leading people to believe they had until Monday at noon to submit and offer and then not doing that would also be a no, no! Whatever rules you apply to take advantage of the multiple offer scenario should be even and equal to all parties.
Many times when I am representing a seller, and we are looking at a multiple offer scenario, I ask the seller, “How will you select the winning offer?” They say “that’s easy… the highest price.” Wrong answer. The correct answer is “the buyer most likely to close” that should be winning the bid. Many people will send you in a high offer with no intention of closing (particularly real estate investment trusts). Why? Because they are trying to tie up your home until they can decide if they want to buy it. I know it sounds crazy. In the meantime, your home is off the market for a week or two, and then they terminate the contract on you. You then try to go back to all the other offers you got only to find out those buyers have all found another home to buy. You end up putting the home back on the market and waiting for the next buyer, and this time it’s most likely not at full price or over asking price.
Selecting the buyer that is most likely to close is all about selecting the offer with the best terms and the best price (you’ll notice I did not say the highest price). The best terms are things like cash offers, (make sure they are real cash offers by verifying their proof of funds not just from a letter) waiving appraisals, allowing earnest money to become non-refundable at contract, allowing post occupancy after the sale, waiving inspections, and other favorable terms to you – the seller. Then if you have a good agent representing you, he or she should be able to work one offer against the others, so you end up with the best price and best terms. This is all a very tricky dance because the conversation between all the agents starts off just as a verbal negotiation but then needs to turn to a written negotiation. This all has to happen within a time deadline while not scaring off one or more buyers. You need to keep all the buyers in the game while the negotiations are going on both verbal and written. Remember, if you have not chosen wisely, you’ll end up with a terminated contract, no buyers, and starting all over.
Your home for most people is the most expensive asset you own, why mess around? Hire a professional that can navigate the tricky multiple offer scenario and get you the highest price in the shortest amount of time.
Dan Polimino is a Broker/Owner with the Colorado Dream House Team, Keller Williams Realty DTC. Contact the Colorado Dream House Team at 720-897-3758, firstname.lastname@example.org, codreamhouse.com or coloradodreamhouse.com