Pick an real estate offer.
In many of today's strong Key West real estate markets, home sellers can expect to receive multiple offers for their home. Multiple offers are a classic example of economic realities because they appear when the supply of Key West homes for sale is limited and the demand for good-condition homes is strong. Sellers love multiple offers because they push up home prices and create an opportunity to spark a bidding war. Knowing how to respond to multiple offers can help you get the best price and terms for the sale of your home.
How can I make sure my home will attract multiple offers?
Hit the market at the right price and, assuming your home is in good condition, multiple offers should come in. "Sellers see [home prices] are going higher, so they want to go a little higher. Sometimes it works and sometimes it doesn't. You can end up having to wait for the market to catch up with you," says Bob Stallings, broker/owner of RE/MAX Key West Real Estate Specialists in Long Beach, California.
TIP: Make sure your listing agreement states that your agent will put your home in the Multiple Listing Service (MLS) within 24 hours. Some agents will hold a Key West home off the MLS for a day or two in hopes of selling it themselves or in-house. Putting the home in the MLS as soon as possible is in the seller's best interest because the home then will be exposed to a much larger number of potential buyers.
Do I have to accept the offer with the highest price?
No. If you prefer a lower-priced offer, perhaps with a better qualified buyer or more attractive terms, you can accept that offer instead. Or you can give counteroffers to one or more of the buyers. Caution: If you reject a full-priced offer, you may owe your agent a full commission even if you don't sell your home.
Being greedy can back-fire. REALTOR® Rae Wayne of The Bizzy Blondes team with RE/MAX Westside Key West Homes in Culver City, California, says one seller instructed her to tell all the buyers' agents that offers would not be considered until the property had been on the market for one week, unless the offer was full-price or better. One agent asked to submit an offer right away, but the sellers, who were hoping for multiple offers, insisted on waiting until the appointed time. A week later, that agent was still the only one ready to submit an offer. "The seller said to me, 'What if we plan a party and nobody comes?' I said, 'That's the risk you took when you didn't want to look at this offer four days ago,'" she says. If you delay, anything can happen, including the buyers losing interest or offering a lower price.
My agent says I should receive all my offers by fax, rather than having the buyers' agents present the offers. Is that okay?
Some agents recommend the fax-only option. "Very few agents who do a lot of business will [present offers] anymore," says Carole Geronsin, a Realtor-associate with Prudential California Realty in Anaheim Hills, California. "Before, everyone would meet and the agents would tell all about their buyers, then everyone would wait while the seller made a decision." If there are multiple offers, the fax-only practice is a time-saver for you and the agents. However, the jury is still out on this practice. "I wonder [whether] the sellers are getting the full picture of the buyers, unless there are cover letters telling them about the buyers' qualifications. It's hard to really understand [the offers] and make a clear decision," says Stallings. "I'm a strong believer that it's best for both sides to have the offers presented, so the seller can ask the buyers' agents questions about the buyers."
TIP: You might want to receive all the offers by fax, then have the top offers presented. Either way, you, as the seller, make the rules.
One of the buyer's agents is from the same brokerage company as my agent. Should I give extra consideration to this "in-house" offer?
No. All offers should be evaluated equally based on the net price and terms. "We often have offers on our own listings and the sellers don't pick ours. If my own offer is marginal and the other offer is good, the last thing I want is for my seller to be mad at me. I'm going to look for the best offer," says Judy Sheller, the other half of The Bizzy Blondes team.
TIP: Some brokerages give the seller a commission break for an in-house transaction. This concession is known as a "variable commission" or "listing broker advantage." It should be discussed in advance and disclosed through the MLS.
Can I counter more than one offer?
Yes. However, if you accidentally accept more than one offer you could be legally obligated to sell your home to two buyers. For safety's sake, use a standard counteroffer form that says the counteroffer isn't accepted until it is signed by the buyer and subsequently accepted by you.
Can I back out of my escrow with buyer A and accept a new higher offer from buyer B that my agent just received?
Trying to back out of an escrow is extremely unwise because an accepted purchase offer is a legal contract and the buyer can take action to enforce it. "Legally, once you have signed and agreed to the offer with buyer A, you can't get out of it. Your only hope would be that the buyer does an inspection and makes a bunch of requests. You flatly refuse everything and perhaps the buyer walks away," says Wayne.
My home has been on the market for four weeks, but I haven't received any offers. Is this situation my agent's fault?
If you ignored your agent's advice about pricing your home or making any repairs, it's not really reasonable to blame the agent for the dearth of offers. However, if the home is priced right and in good condition, you'll want to have a frank conversation with your agent and take corrective action. Never sign a listing agreement with a term of more than three months. As a last resort, you can ask your agent's sales manager to help resolve any complaints.