Multiple offers in a Buyers Market.
Really? REALLY!
When was the last time you heard this kind of music?
Of course I was headed out of town this weekend when a listing that I am co-listing received a number of showings and rumbles of multiple offers within the first 72 hours. Even though we are in a buyers market if the property is less than $400k, looks good, and is in a great location you can still expect to see multiple offers. I've been lucky this year - I've sold two properties on the 1st day they were listed this year. So, how can this be any better?
I just attended the North Carolina Real Estate contract update in July and knew there had been some changes in this area to level the playing field for the buyers. In the past the SELLER was in the driver seat. Broker Bryant wrote a great blog on multiple offers called Liar, liar pants on fire. Not me!! that describes the disclosures from the National Association of Realtors and some strategies on negotiation which I leaned on during the process.
Just to reiterate those standards of practice I have included them here. Code of Ethics
Standard of Practice 1-15
REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers' approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (Adopted 1/03, Amended 1/06))
Standard of Practice 3-6
REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation. (Adopted 5/86, Amended 1/04)
Now fast forward to North Carolina's new interpretation of the North Carolina Offer to Purchase:
A broker shall NOT DISCLOSE the price or other material terms contained in a party's offer to purchase, sell, lease, rent, or to option real property to a competing party without the express authority of the offering party.
The bottom line - The NCAR wants to make sure that, in a multiple offer situation, if one knows then all should know. Sharon and I agreed that it would be best to send an email(the same email) to all parties communicating the fact that we had a multiple offer situation, some very strong offers, and to submit all offers by 3pm on Sunday in order for our Seller to make their decision.
It's a tricky situation, and I don't know what the rules are in your state, but my job is to get the highest price possible for my clients and the best terms possible. Based on our negotiations of this offer I believe we acted in the best interest of our sellers.
Just keep in mind as we transition to the new North Carolina contracts that the rules have changed and they give the buyers more control of a multiple offer situation.
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Tracy.... you wonder why more states wouldn't be on the same page. And because of this change of rules, do you like the new change or not? And I wonder how many play by the same rules. I bet that answer is very scary. What about those that discriminate, giving only certain people some of the information. And how does a law such as this get upheld??
Tracy - When I have multiple offer situations I ask all agents to fax their offer to the seller's attorney by a certain date/time - even if they want to present the offer in-person. I find this helps remove any appearance of impropritety e- specially if one of the offers is from me or someone in my firm.
I like the rule. I seems fair.
Ahhhhh, I long for the days of multiple offers! I will be ready.
Dick Beals
Tracey,
I always hammer home to point that each buyer should be in the same posistion, tell one, tell all;
don't tell one, tell none.
Thanks for sharing.
Jim
Tracy,
I'm not a real estate agent, but is it not beneficial to all to disclose the same material information about all offers.
Speed up the process, ensure equitable treatment.
I assume that the preapproval status of buyers is also part of the offer. I had a sale 2 months ago, my client was approved and ready. The seller kept waiting for the other, "better offer", to get loan approval.
Property is still on the market. My client is in the process of negotiating another home.
Do I understand the new law rightly? Whether or not you (listing agent) disclose all offers depends on the buyer's approval to disclose the terms of the offer?
In that case, assuming permission is not given, there is no way to disclose offer details?
Does the situation arise then when one buyer knows the terms of the other offer, but not vice versa?
BTW, how does everyone in NC like the ban on YSP for brokers? When does it come into effect?
Richard
Hi Tracy,
I'd love to have this "problem"! LOL. I agree with the way you are handling this, exactly what I would do.
Hard work best offer fair to all parties that is what it is all about.
We are seeing a lot of multiple offer situations in well priced properties as well. Our new short sale addendum states the seller has a right to continue to market the property and send offers to the bank.
Jim - tell one, tell them all, but don't reveal price or terms.
Richard - Terms and conditions were a key part of our sellers decision. Not sure I understood the ban on YSP?
Cynthia - Some properties are unique and can be sold easily. The big kicker is making sure you have a great agent that will market the property, get the word out, and get top $$ for it. That is what happened in this situation!
Response person - 6 is better than none.
Christine - this was no short sale. No bank. Just a great looking home in a great location updated and ready to roll. We even had to remove the appraisal contingency too. It's all about an updated home in a spectacular location. There arent' many, especially ranches!