When faced with a multiple offer situation, expect the unexpected. There are no hard and fast rules when it comes to multiple offers in a home sale, and we have seen sellers handle the situation in many different ways. Anything can happen.
A seller may have their agent contact each of the buyer's agents, notify them that they have received multiple offers, and give each buyer until a specified time to submit their highest and best offer. At that point each buyer has the opportunity to make their offer more attractive by upping the price, and/or changing some of the terms or contingencies. Once the time to submit the revised offer has lapsed, the seller will review the offers and may either accept one of them, or negotiate further.
Alternatively, sellers may decide they do not want to notify any of the buyers that there are multiple offers on their home. They may be concerned with the possibility that some buyers may withdraw their offer if they think they are going to be involved in a bidding war. They may decide to present a counter-offer to one of the buyers to change perhaps the price or some of the terms. If they don't come together with that buyer, they may move on to the next offer and do the same. Although you might think that the sellers should be fair to each of the buyers involved and give each a chance to sweeten the deal before making a decision, that doesn't always happen.
Keep in mind that you will not know the details of the other offers, and most likely will not know anything about the sellers or their motivation to sell. This information is confidential and the listing agent is obligated to guard their seller client's confidence.
We've seen sellers who want to negotiate with the first offer they received, because it was the first one. If they come to terms with that first buyer, they don't want to entertain any of the other offers.
There is also the situation where the seller knows one of the buyers. Perhaps a buyer is the son or daughter of a friend or neighbor or someone the seller knows through their community involvement. In this case there is a good chance the seller is going to negotiate with that buyer.
Some sellers are very attached to their home and want a certain type of buyer to have it. Perhaps they raised their children in the home, and they want the home to go to a nice young family. Sentimental sellers may pass up more money or better terms to sell to buyers who appeal to them.
So what's a buyer to do? If you are shopping for a home in a 'hot' market where multiple offers are commonplace, our best advice is to come in with your highest and best offer right from the start. Given the unpredictability of home sellers, this strategy will surely increase your chances of getting the house you want.
Contact us to help you purchase your new Chicago area home. You need an expert to guide you through the process, give you the advantage of their knowledge and experience, and negotiate on your behalf.