24 September 2020
Buying in competition: Solving the multiple offers riddle
It has become very rare to find a property and be the only buyer wanting to make an offer. Why? Property is in high demand.
When there are 30 three-bedroom houses on the market in one suburb, yours has to be the best-priced home to attract what few buyers there are to go around. In contrast, when there are only five three-bedroom houses on the market in that same suburb and 30 groups at each open home, you are going to have competition.
And when there is competition amongst buyers, the seller can choose the offer that works best for them. This has the potential to become a multiple offer situation.
So how can you navigate this situation?
Both vendors and purchasers should be aware of the multiple offer process and make sure they're prepared. Here are a few suggestions to keep in mind should you enter a multiple offer scenario:
Just doing my job
An agent wouldn't be doing their job properly if they brought just one offer to the table for vendors. Once a single purchaser has set the ball rolling, so begins the process whereby the agent elicits several offers to present to vendors.
While it may not initially seem it sometimes, multi-offer situations are not always a bad thing.
If you are making a good offer at a fair market value, then the fact that there are other offers weaker than yours will make it much easier for the vendor to accept your offer as they have seen the market’s response to their house and know that you are the most genuine buyer.
Get it in writing
Although agents owe their duty of loyalty to the vendor to get the best outcome, they also have a duty to treat buyers fairly. It is important to note that to be in a multiple offer situation there must be more than one offer in writing; an agent can’t just say you are in a multiple offer scenario if that is not the case.
You are well within your rights to ask the agent if they have received any other written, signed offers on the property. They are obliged to give you a direct answer to this question.
Knowledge is power
Research the property as much as possible to help determine what your best offer will be and talk to your agent to make sure you are clear about any deadlines and about the sale process as a whole, particularly the multiple offer scenario should it arise.
Have your building inspector, bank manager and lawyer ready to go so you can complete due diligence and inspections quickly.
Do your due diligence early
Once these experts are in place you are in a better position to make an informed decision on how to proceed.
In preparation for putting your monetary offer forward, think about how you can reduce or eliminate as many conditions as possible, and cover any areas of risk to you by completing your due diligence before submitting your offer.
Put your best foot forward
If you are a buyer in a multi-offer process, you need to put your best offer forward because you may not have an opportunity to increase your offer or re-negotiate.
Remember that the highest offer is not always the successful offer. An offer with a lower price but fewer conditions may be chosen over a higher price with more conditions.
Contact a buyer specialist to help you find out about new listings and access them quickly – they will help to streamline the process for you. You can find out more about their role in our next blog!