If the seller receives multiple offers on a property, buyers may be requested to submit their highest, best and final offer by an agreed upon date and time.
This is fairly common and the process is handled a little differently by each seller. In all cases except HUD homes, WILMOTH will communicate with all buyers and provide a deadline to change their offer if desired.
Disclosure of Existing Offers
A major improvement in selling bank owned homes is the standardization for processing multiple offers. In the past many agents insisted that the selling agent disclose how many offers a seller had received. Or that the first offer submitted is the only one a seller can respond to before moving to another offer. Both of these beliefs are wrong.
Disclosure of existing offers is only to be done by a listing agent when given that permission as part of their listing or other written agreement. It is not a violation of the Realtor Code of Ethics to decline such requests from other agents.
Article 1, Standard of Practice 1-15 of the Code of Ethics of the National Association of REALTORS®, requires that listing agents disclose the existence of multiple offers ONLY with the seller’s approval. An addition to the Code of Ethics in the last few years added the following requirement:
Where disclosure is authorized by the seller, REALTORS® shall, if asked, also disclose whether the offers were obtained by the listing broker, another licensee in the listing firm, or by a cooperating broker.
A buyer or agent should not expect disclosure of multiple offers. A seller must authorize it. Most of the bank sellers now authorize disclosure, with a set of procedures for how processing of the multiple offers are to take place.
Multiple Offer Typical Process
When WILMOTH Group receives a second offer on one of our bank owned listings, all negotiations on the first offer may stop per the seller’s instructions (unless the seller tells us to accept the first offer already presented.)
WILMOTH will send to all parties with offers submitted, and all future offers submitted, a Multiple Offer Disclosure form. This form will usually be completed by all buyer’s agents. This form MUST be returned with a Purchase Agreement that reflects the buyer’s highest and best offer. The Multiple Offer form is specific to each seller and it also must be completed completely.
If your Buyer had the first offer you will be contacted and informed we are now in a multiple offer situation and that you will need to submit a Multiple Offer Disclosure form.
One Chance To Make A Good Impression!
It is important that a Buyer recognize when a Multiple Offer Disclosure is requested they are being given ONE chance to make their “Highest and Best” offer. Therefore, if the Buyer was the first to submit the purchase agreement may be changed if the Buyer so desires (recognizing that there are now going to be multiple offers and those will all be considered highest and best offers). Please understand that this is a one time offer opportunity! There will not be requests for revised offers. The Seller might choose one offer to work with and make a counter offer to it but this is the Buyer’s one chance to make their best offer.
How The Seller May Respond
The Seller might do one of several things:
- reject all offers
- accept one offer
- counter one offer
When we have a final decision from the Seller we will alert you.
Finally, under NO circumstances will WILMOTH Group reveal the content of any other offer received.
Multiple Offer Priority
Most seller’s with multiple offers will wish to gravitate to a negotiation with the buyer who offers the most favorable terms. Who is to judge what the seller considers most favorable to their own circumstances? An unfavorable offer. submitted before a favorable offer, does not obtain priority status. A skilled negotiator will understand how to manage the receipt of multiple offers. Or they will simply follow the sellers instructions which usually involve receipt of a highest and best offer by a certain deadline extended to all the offers.
HUD Homes Exception
With HUD homes all bidding is coordinated through HUD and notices will usually come from HUD or an Asset Manager. The notice will provide the opportunity to rebid for your buyer at the HUDHomestore.com. With HUD homes please remember, WILMOTH Group does not have any involvement in the bidding process.
Don’t Let The Fear of Multiple Offers Keep A Buyer From Participating!
The corporate owned home purchase process commonly involves multiple offers. It should not cause buyers or agents to shy away from making an offer on a property. A good understanding of the process, with expectations set accordingly, will result in the best experience for all.
What is the most important thing for a buyer to understand?
A low offer may never get a second chance.
Sellers often select the most competitive offers and allow them a “highest and best” period to submit one more offer. There is no requirement that every submitted offer will receive this opportunity.
The National Association of Realtors has published an excellent guide for Realtors to use when advising sellers and buyers in multiple offer situations. Click here to download “Presenting and Negotiating Multiple Offers.”
Why Low-Ball Bids Are A Bad Idea With Bank Owned Homes