What is a Multiple Offer? Mortgage Terms Explained

by Jessica Brita-Segyde

Have you ever heard a Realtor talk about being in a “multiple offer situation?” This means that two or more active offers exist on the same property. The offers may have come in at the same time or within a day or two of one another. Sometimes, the buyer or seller is considering a counteroffer when a new buyer enters the picture. In today’s tight real estate market, multiple offer situations are more common than ever. In fact a seller may find themselves in a situation where three or more purchase offers are presented simultaneously. This scenario can make buyers and sellers anxious, and understandably so. Buyers don’t want to overpay, and sellers don’t want to make the wrong choice. How can all parties to the transaction handle a multiple offer situation in the best way possible? The following five tips will help.

Understanding a Multiple Offer Situation

  1. Work with an experienced Realtor. A seasoned real estate professional, preferably a member of the National Association of Realtors (NAR), will stay calm and logical throughout every transaction. He or she has been through this before and will keep things on track when advising you and also while negotiating with multiple parties.
  2. Recognize that you may have to make decisions based on limited information. The sellers’ agent is acting as their fiduciary and may choose not to disclose information about the other offers to the buyers’ Realtor. Conversely, buyers’ agents are held to the same standards and may withhold information like the maximum loan amount that their clients could obtain. In fact, the NAR mandates confidentiality in some situations. It’s difficult to accept, but you may not know everything about the other parties to the transaction. Working with a Realtor you trust can help buyers and sellers find peace amid the uncertainty.
  3. For Sellers: Understand that the “highest and best” offer doesn’t necessarily mean the highest offering price. There are many moving parts to a purchase agreement. The sale price is important, but so are the other financing terms. In addition to price, consider the appraisal, inspection process, time to close, and other contract terms. Take time to assess and compare each offer before choosing which one to pursue.
  4. For Buyers: Searching for a home takes time and energy, and the unexpected competition may have you feeling discouraged. If you learn that your offer is not the only one at the table, consider relinquishing some of your dealbreakers. Also, remember that sometimes the best deal is no deal at all. Do not make decisions based on emotion or a desire to “win.” If the multiple offer situation pushes up the sale price beyond your comfort level or ability to pay, it is okay to move on.
  5. Prequalification is essential. If you are a buyer, do not even consider making an offer without securing your financing first. If you are a seller, favor offers that come with a solid pre-approval letter. If you want to know how much home you could qualify for, the Ruoff Loan Team can help.

The real estate market is cyclical, emotions are involved, and every transaction has its ups and downs. Home inventory has tightened-up in recent months and multiple offer situations are common today. Don’t panic. Work with a seasoned real estate professional. Make sound choices and know your limits. You may not get the first property you try to purchase, but with financial preparedness and a good agent on your side, you will eventually find (and buy!) your next home.


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