The real estate market is moving at a rapid pace and once again, multiple offers are a common occurrence on new listings. Sellers love them and buyers hate them. Last weekend I showed a couple a house that had been on the market less than 24 hours, and we found 4 other agents and their buyers looking at the house at the same time. My first time home buyers were overwhelmed at the idea of competing against other buyers for this house and did not make an offer. There were 6 offers on the house by the end of the day. The house was listed for $189,900 and the offer accepted was $20,000 over the asking price.
That was a good day for the seller, but the property still has to appraise for the purchase price or they could end up the lowering the price for the buyer to get financing. The offer was also contingent on an inspection and sometimes a buyer will try to renegotiate the price, request repairs, or cancel the purchase agreement due to fear that they offered to much for the house. It is unusual for a buyer to pay 10% over list price, even in multiple offers. My guess is that this buyer was tired of losing out on other offers and loved the neighborhood.
The state approved listing agreement asks the seller to decide if multiple offers shall be disclosed to the buyers or not. Most people think you should disclose multiple offers to create a bidding war and drive the price up, but it doesn’t always work that way. There are many buyers that don’t want to be in a bidding war and there have been cases where disclosing multiple offers has chased all of the buyers away and the seller had no offers on the home.
An experienced real estate agent can explain the pros and cons of disclosing multiple offers should they arise when you are selling your home. Whether you are a seller or buyer, a real estate agent should provide you with a detailed market analysis, to make sure you comfortable with the value of the home you are selling or buying.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.