This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.
Q. I don’t want to get ahead of myself too much, but we are putting our house on the market next weekend. It’s in great shape and we think it is priced well. If we are lucky enough to find ourselves with multiple offers, what is the best way to handle that situation?
A. There are a number of ways I have seen multiple offer situations handled. I think the best strategy is to set a deadline by which all offers must be in. I prefer to go live on the market Wednesday or Thursday with a Monday evening deadline for offers. This gives buyers plenty of time to see the home and gives agents plenty of time to thoughtfully construct their offers. I’ve found that waiting any longer than can lead to drop off in interest.
You’ll need to make it clear to agents that they should present their client’s best offer. Otherwise you will have some buyers that are expecting back and forth negotiation.
I highly recommend allowing escalation clauses. In my experience, buyers are much more willing to reach on price if they feel it is justified by what other buyers are also willing to pay. I’ve come across listings recently that didn’t allow escalation clauses and for the life of me, I can’t figure out the justification for such a rule. It almost guarantees that buyers will take a more conservative position when it comes to deciding what terms to offer.
I have a spreadsheet template I created to keep track of the offers. It makes it easier to compare the merits of each offer, like: price, escalated value, contingencies, EMD, closing date, seller concessions, rent-back offered, etc.
Once you have chosen the contract you would like to work with, you still have the ability to counter certain items that you would like the buyer to improve. For example: you may like everything about one of the offers, but want to request a rent-back period.
If you are already getting above asking price, then I don’t recommend countering price unless it is somehow justified. For example: You really like everything about offer “A” but it is a few thousand dollars less than one or two of the other offers. You might decide to reach out to offer “A” and let them know you are willing to go with their offer if they can adjust their price to match offer “D.” Some buyers may tell you to take a hike, while other buyers will be relieved that you gave them the opportunity.
I also recommend asking for backup offers. It tends to keep your primary buyer much more motivated and provides you as the seller with a clear backup plan. This is especially important if you are in the process of buying a new home for yourself.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.