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Saturday, February 23, 2013

Multiple Offers - Is this a scam? How do I know this is the case?

"It "seems to be happening more often these days than in the past five or six years. 
What is “it?” 

It is multiple offers.  And it will be more common as the market heats up. 

Why is the market heating up?  Lower inventory, increasing demand, and still some pretty low interest rates.

What should this mean to a buyer?   Not every situation involves multiple offers.   But when it happens the seller is in a perceived position of advantage.

And the seller's agent will likely contact all of the buyer's agents with this message - give us your best offer.

In this situation one of the offers already on the table is the highest and best.

But which one?  The seller's agent is not going to tell you if offer is currently the highest.  After all, they are trying to get the highest price possible for their client.

I remember being asked by a real savvy buyer a couple of years ago "Is this a scam or are they just trying to get more money out of me?"   I knew the answer in this case - "No" and "No."   Do I know 100% if there really is another offer?  Usually not.

So what should a buyer do when presented with a multiple offer situation?  Seriously consider your offer price.  Are you alright if you do not get the property?  Are you satisfied your offer is reasonable and the highest you think a property is worth?  Consult with your agent and respond in a way that, regardless of outcome, you are satisfied.

As the market heats up buyers should consider the offer.  Low ball prices are no longer the order of the day - even on foreclosures and short sales!

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