House bidding war: Two bids, two homes, one buyer?
February 23, 2016
Sometimes multiples offers can prove advantageous for the agent and buyer if handled correctly.
Developing two different offers for one buyer can be a difficult process to navigate, but a helpful one for the client as well, since it can help real estate agents land better deals, especially when inventory is limited. This sort of strategy should be reserved for agents who are willing to push through what can be a labor intensive process to wrangle the best possible price for a home. The end result is worth the extra work an agent puts into this sort of bidding.
In the hottest real estate markets, where competitive offers are frequent, going from property to property one bid at a time can be time-consuming and discouraging for the buyer. This is where simultaneous offers can prove beneficial - especially for people who are less picky about the size and style of the home they ultimately close on. This strategy can also work well in a neighborhood where the listings are all similar in size and style. Sellers often leverage buyers against each other to receive the best bid. This is essentially the same strategy, but from the other side of the transaction.
Real estate agent etiquette regarding multiple offers
There are some ethical concerns when making simultaneous bids, though. First off, it is only right to offer sellers full disclosure. Real estate agents should not make more than one bid without informing sellers of what they are doing. This should be a completely transparent process. Following through with such a strategy without informing all parties is looked down upon, and should always be avoided. As long as everyone is aware of what is going on, though, simultaneous offers are generally acceptable.
The other ethical question concerns whether the buyer is actually interested in both properties. If a real estate agent plans to make simultaneous offers, he or she must make sure that the client is interested in both listings.
How to proceed once one of the sellers accepts a bid
Once the buyer and seller have come to an agreement on one property, the real estate agent should immediately rescind all other offers. This too, simply being the right thing to do in these situations. As soon as the other bids are pulled, the agent and buyer can begin working with the seller on that single listing.
Making simultaneous offers is a plan that takes some careful maneuvering. However, in a competitive market this sort of strategy can pay dividends. It is up to the real estate agent and the buyer to decide whether the market climate is right and the extra work is worth the potential reward before pursuing this sort of approach. From there it is all about transparency and well-intentioned offers. If the right balance can be achieved, then in the right market it is certainly possible and acceptable to make simultaneous bids.