Multiple Offers: Seller’s Dream or Hidden Trap? Here’s What You Need to Know
Let’s be real—multiple offers are every seller’s dream. They can push up the price of your home and give you some serious negotiating power. But hold up! While multiple offers (aka bidding wars) can be great, there are a few hidden traps you’ll want to avoid. So, let’s break down what every seller needs to know about managing multiple offers.
Why Do Sellers Get Multiple Offers?
It’s called the HOLD BACK strategy. As agents we under-list your property, meaning we list it below market value, in order to create interest and then hold back on taking offers until a specific date.
For example, if homes in your area are selling for 950K, we may list your property at 799K and wait a week to take offers. This allows the agent to market your property for a week, gives time to the buyers to schedule in a viewing at a time that works for them, and then allows the buyer to set the “market value” of the home. Buyers determine value, not the agents. As agents we can give you a range of what your house will sell for, but at the end of the day it’s what a buyer is willing to pay which is why the buyers set Market Value. If homes that are comparable in your area are selling between 925K-975K, your agent cannot give you an exact price on value, it’s just a range. The buyers will determine what they feel it’s worth based on what they need in a house and by using the comparable sales to ensure they are not over paying. A buyer can still go outside of that range for many reasons, but they will use that range to decide just how much they feel it’s worth to them.
Sorting Through Offers on Offer night
Now comes the fun part—going through the offers. It’s not unheard of to get 5, 10 or even 20, offers in a hot market (yep, we’ve seen it) on offer night. But whether you have five offers or 20, your agent’s job is to sort through them, compare terms, and pick out the strongest ones. Typically, you’ll want to focus on the top two or three offers, but it’s always good to keep some backups in case things don’t go as planned.
Negotiation Is Your Best Friend
Even when you have multiple offers, there’s always room for negotiation. Your agent can play offers off each other to get the best possible terms and price. Sometimes, a buyer might offer the best price but has some weaker terms—this is when your agent can use another offer to push them to improve.
Reason Over Greed
While it’s tempting to push buyers as far as they’ll go, be careful not to get greedy. Yes, buyers want your home, but they have agents too—and those agents are there to protect their interests. If you push too hard, buyers might walk away, and that’s the last thing you want.
Holding Back Offers vs. Bully Offers
If your agent recommends holding back offers, you might get what’s known as a “bully offer.” These come in before the hold-back date and can be pretty tempting. They usually come from buyers with big budgets who want to lock things down before the competition gets a chance. While it might feel like a win, it’s often better to wait and see all the offers before making a decision—unless, of course, you’re in a rush or the bully offer is truly too good to pass up.
It’s Not Always About Price
Sure, price is important. But in a multiple-offer situation, the highest offer isn’t always the best one. You want to pick the buyer most likely to follow through. Here’s why:
Financing: A buyer might offer $50,000 more than everyone else, but if they’re waiting on financing approval, that’s a big risk. A slightly lower offer from a pre-approved buyer might be the safer bet.
Inspections: If your home is older, inspections can reveal issues that scare buyers off. A buyer willing to waive the inspection might be worth considering, even if their offer isn’t the highest.
Selling Their Current Home: An offer contingent on selling their existing home? Major red flag. If their sale falls through, so does yours.
Pro tip: Get your home inspected before listing so you can deal with any potential issues up front. This gives buyers confidence and removes inspection contingencies from the negotiation process.
Knowing When to Play Your Best Hand
In a heated bidding war, it can be tempting to declare “best and final offer” early on. But timing is everything. If you pull this card too soon, you risk scaring off top bidders. Stick with your agent’s advice and avoid letting emotions get the best of you.
The Bottom Line: Trust Your Agent’s Instincts
Your agent is your secret weapon in a bidding war. We’ve been through this process more times than we can count, and we know how to spot the best offer (and when something feels off). Plus, we build solid relationships with other agents, so everyone is working fairly. At the end of the day, our job is to get you the best deal possible—and we’ve got the instincts to make it happen.