What to do with Multiple Offers to purchase Your Home?
If you receive two or more offers to purchase your property at about the same time (lucky you), and you counter-offer them all, what if two or more accept? You sure can’t sell it to more than one!
Multiple Counter Offer – Seller
This form, acronym MCO-S, provides the means to manage this process. The seller uses a version of this form to respond to each offer. As stated there … Seller is making one or more other offer(s) to other prospective buyers on terms that may not be the same as contained herein. Acceptance of this Multiple Counter Offer by Buyer shall not be binding unless and until it is finally accepted by the Seller …
Thus the seller remains in control of the process until he/she makes a final choice. A Multiple Counter Offer situation is not an environment for amateurs, or even lightly experienced real estate agents.
Response Deadline – Typically Ignored
Most offers are submitted with a response deadline of 24 hours, sometime less, because buyers want to establish an accepted Purchase Contract ASAP so the seller cannot sell to another buyer.
When a seller has received multiple offers, this deadline is usually ignored. One of the items the seller will put into the MCO-S form changes this deadline to whatever the seller needs for his/her response.
What Seller needs to Do
And what the seller needs is enough time to thoroughly check each Pre-Qualification form, or Proof of Funds letter for a cash offer, to be sure that the buyer has the financial capacity and liquidity necessary to make the purchase as specified in the buyer’s offer.
A wise seller will do this for all offers before responding to any offer because the checking process could eliminate all but one of the offers, in which case the seller’s response would likely be very different.
Different Buyer – Different Counter
As indicated by the quote above from the MCO-S form, the terms in the MCO-S to each buyer may be different, in fact are likely different because the offers are different and the buyer’s capacities are different. The price, terms, close date, earnest money, etc. … anything … may be different in the respective counter offers.
Consider the Buyer Situation
Sellers need to be very mindful of the anxiety, stress and disappointment that is being felt by every one of those buyers. Many people simply withdraw their offers upon learning of the multiple offer situation, and many (most?) buyers at least consider this.
Upon receipt of the additional offer(s), or learning that more than one is about to be submitted, the seller’s agent is well-advised to immediately call each buyer’s agent to assure them that the seller is “very motivated” to sell the property, will make every effort to respond promptly, etc., to try to minimize the negative reactions and encourage each and every buyer to “hang in there” and have a bit of patience.
Buyer Lender Appraisal – Price Limit
If there’s financing involved in any or all offers, sellers need to also be mindful that “the property must appraise for at least the sale price”. There is a limit even if the buyer seems to be ignoring it.
Of course, the attitudes of the buyer and/or seller can be to push the price to whatever, then deal with a low appraisal if that’s the case. NOT a good idea for either side. More often than not, a low appraisal results in the deal “going south”.
Multiple Offers by Buyer
There is also a Multiple Offers process for buyers … and a AAR form Multiple Offer Counter Offer – Buyer (MCO-B). It’s pretty much the same process except backwards from the outline above – the buyer is making an offer on more than one property but ultimately can only purchase one of them.
Sort of a comical question … what if a multiple offer (MCO-B) is made by a buyer for a property that is receiving multiple offers? I’ve never seen that happen and it’s rather unlikely. “Multiples” generally occur in one direction or the other when the housing market is steeply changing one way or the other.
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