Location. Location. Location. Surpassed only by: Price. Price. Price. In our last newsletter, we discussed Bidding Wars. Based on the follow-up messages I received, today we are going to explore Multiple Offers, and how they work.
Quick recap – the goal for most sellers is to get the highest net proceeds (not the highest number of offers). So…here is the most common process on how to achieve that!

1) Offer Dates: I have discussed Offer Dates before, but in the Bay Area it is very common to have an "Offer Date" (i.e. there is a date set in the MLS that the listing agent wants offers to be submitted by in order to meet/present them all at the same time to the seller). The Offer Date does not mean that any offers will be submitted, but it is used to ensure that if they are, they can be compared against each other at the same time. Setting an Offer Date creates a sense of urgency and competition amongst potential bidders. While this may not be the most efficient approach, it is one of the ones most commonly used.

2) Multiple Offers: Bingo! You are selling a great property and everyone wants to live there - you get Multiple Offers in by the Offer Date. Congrats! But, how do you decide which one, if any, to select? How do you know when to counter? This is where the terms can make or break an offer. Price is not always the driving factor (i.e. $50K above the other offer, but a close 5 years from now might not work). Great listing agents will walk their sellers through the process of examining the merits of each offer. We also call lenders to verify the strength of the borrower’s pre-approval (not all lenders are the same).

3) Seller Multiple Counter Offer: This occurs when more than one offer comes in, and the seller wants to counter. If you are a buyer, this is where the work really comes in. Do you come up in price? Were you holding back? Do you try to change other terms of the contract to make it more appealing? Buyers will have a specified amount of time to make any changes to the Purchase Contract that they initially submitted. Usually, as a seller, if you get to this point, you should be able to sell your property.
4) Amended and Updated Offers: The buyers that you countered (you do not need to counter all offers) submit their new and updated offers (they can keep everything the same or change anything they want).
5) Review and Selection: At this time, most sellers ultimately decide on one of the offers (although they technically can counter again if they want to).
For each client I work with, I try to explain this process upfront and early on. The real estate transaction in the Bay Area is not cut and dry. There are multiple moving pieces and, especially with buyers, the “rush” of a transaction needs to be properly handled throughout the Multiple Offer process.

If you ever have any questions at all, please do not hesitate to reach out. At MinnGo, we realize that real estate is not something our clients think about everyday. Lucky for you, that is what we live and breath.

Until next time.