There may be times when you receive multiple offers for the same property listing: how do you review these offers and determine which one seems the most beneficial for your client? In this guide, we explore how to handle multiple offers of purchase on real property.
“Buyers and sellers need to appreciate that in multiple offer situations only one offer will result in a sale, and the other buyers will often be disappointed their offers were not accepted.
While little can be done to assuage that disappointment, fair and honest treatment throughout the offer and negotiation process, coupled with prompt, ongoing and open communication, can enhance the chances that all buyers – successful or not – will feel they were treated fairly and honestly.”Source: A Buyers’ and Sellers’ Guide to Multiple Offer Negotiations, (National Association of REALTORS®, 2005).
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Legal & Ethical Considerations
Typically, state governments establish laws addressing client confidentiality and disclosure, and may even denote the timeframe within which one must respond to an offer of purchase on real property. The REALTOR® Code of Ethics also establishes requirements on responding to offers and protecting the interests of clients:
- Article 1, Standard of Practice 1-6 denotes that, “REALTORS® shall submit offers and counter-offers objectively and as quickly as possible.”
- Article 1, Standard of Practice 1-15 addresses REALTORS®’ obligation in multiple-offer situations: “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, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker.”
- Article 1, Standard of Practice 1-7 denotes that, “When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide, as soon as practical, a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/ landlord has waived the obligation to have the offer presented. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease."
- Article 1, Standard of Practice 1-8 denotes that “REALTORS®, acting as agents or brokers of buyers/tenants, shall submit to buyers/tenants all offers and counter-offers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing.”
- Article 1 denotes that “When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client.”
- Article 1, Standard of Practice 1-9 establishes requirements for ensuring client confidentiality and non-disclosure compliance.
Find the full text of the REALTOR® Code of Ethics here.
Legal Breakdown: Escalation Clauses (Iowa Association of REALTORS®, Aug. 26, 2020)
Advice for Real Estate Professionals
How Agents Are Winning Bidding Wars in America’s Most Competitive Markets (Housing Wire, Sep. 9, 2020)
How to Handle Bidding Wars Legally (REALTOR® Magazine, Sep. 3, 2020)
2020 Bidding Wars: How to Win (RISMedia, Aug. 27, 2020)
42% of People Who Bought Homes during the Pandemic Engaged in a Bidding War (HousingWire, Jun. 17, 2020)
Bidding Wars in a Pandemic? (REALTOR® Magazine, May 21, 2020)
How to Handle Multiple Offer Situations (And Win!) (Quicken Loans, Sep. 26, 2019)
Agents Report Sharp Declines in Bidding Wars (REALTOR® Magazine, Mar. 28, 2019)
How to Win Bidding Wars: Tips From 11 Top Producing Agents (The Close, Feb. 22, 2019)
How to Win a Multiple-Offer Situation for Your Buyers (NAR Young Professionals Network: The Lounge, Sep. 12, 2018)Staying Mum on Multiple Offers (REALTOR® Magazine, Mar. 2018)
Advice for Clients
Should Sellers Disclose When They Have Multiple Offers on Their Home? (HomeLight, Jun. 21, 2020)
How to Handle Multiple Offers on a House (Mashvisor, Dec. 25, 2019)
Multiple Offers-Competing Home Offers (the balance, Jan. 7, 2019)
7 Reasons to Accept the First Offer on Your House (realtor.com®, Dec. 19, 2018)A Buyers’ and Sellers’ Guide to Multiple Offer Negotiations (National Association of REALTORS®)
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
Close That Sale (Audiobook)
Improvisational Negotiation (eBook, Kindle)
Negotiation Genius (eBook, Kindle)
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