It’s one thing to want a house, but it is a totally different thing to actually get it under contract. This can be a surprise to buyers today. I can’t speak for decades ago, but I can say that when the market is hot, there are often times when there are other offers on a house. This can cause some nervous feelings and even disappointment if you do not get the house that you want to buy. Can my agent see if there were other offers on a house? Let’s talk through the mechanics of what actually happens during the home buying process.
Finding a home for sale
So, you and your agent see a house online and decide to set a showing. The request to show comes back accepted and you physically see the interior and exterior of the house. You decide that this is the house you want to buy.
Making an offer
This is the tricky part. You have to decide what you are going to offer to buy the house. At this point, you could ask your agent if they can see if there are any other offers on the house. This makes a lot of sense, but even then, odd things can happen. For example, between the time you decide to write an offer, and the time you go to submit the offer, another offer on the house can be accepted. Why would listing agents tell you it is ok to see a house only to have it be sold by the time you write an offer? Well, it’s because neither the seller nor the listing agent knows who is writing an offer after a showing. You can have 20 showings without an offer, and you can have a single showing that gets an offer. Let’s say that in this example when your agent asks if there are other offers, the listing agent says “Yes”.
There Are Other Offers On The House
Your agent can be certain that if a listing agent says there are offers on a house, there are really offers. What you want to know as a buyer is what the other offers are. Unfortunately, listing agents won’t tell your buyer agent what those other offers are. Why? Well, for one, it’s pretty unfair to the process and two, the eventual accepted offer could always fall through. After all, not every buyer actually buys a home. When that accepted offer falls through, you can bet that the listing agent will call every buyer agent who submitted an offer and request a new one.
The Agent Conversation To The Buyers
The conversation during the process of writing an offer usually goes something like this.
Buyers: We would like to write an offer on this house
Buyer Agent: Ok, let me check with the listing agent and see if there are any offers.
Buyer Agent: There are other offers on the property
Buyer: Ok, how many and what are they for?
Buyer Agent: Listing agent says they have 2 already in hand, and they are expecting 2 more
Buyer: How much are the other buyers offering?
Buyer Agent: I’d love to tell you that but I don’t know and they aren’t going to tell me.
What To Do If There Are Multiple Offers On A House
It may be hard for you to believe a house has so many offers to purchase. You may think your agent is lying to you. All I can say is that I don’t operate that way. If the listing agent says there are other offers, they are actually doing us a favor. Think about it like this. No one wants to waste time or energy on filling out paperwork. Therefore, if there is already an offer on the property, it’s probably not the best use of anyone’s time to write an offer that is 50% below asking price. Here’s some things we can already have a pretty good idea of if there are other offers.
- Probably not a good idea to write a contract with a ton of contingencies. This means that we should probably be writing an offer that is very clean. What is a clean offer? A clean offer is one that doesn’t have a bunch of hoops for the seller or buyer to jump through. As an example, if there are multiple offers on a property, it’s highly unlikely the seller is going to accept your offer subject to you selling your current house. Why would they? Three of the other offers are likely to be quick closes.
- You need to pick a price that is competitive. The question you have to ask yourself at this point is “What is this property worth to me”. If it’s worth asking price based on other properties you have seen, write at ask. Accept that you may not get the property.
- The seller has the upper hand. Look, the seller may have 3 or 4 offers, and the winning offer is going to benefit the seller. There’s no way for you to gain the upper hand back because this isn’t really a negotiation at this point. Last summer, a buyer client and I saw a house that brought 30 offers on the first day! Even if the first buyer doesn’t close, there were 29 other offers to purchase the house. The seller and listing agent aren’t going to waste their time worrying about not selling the house. They know they have a house that people want. The evidence is that they have multiple offers.
- With the upper hand to the seller, don’t expect a ton of concessions. If you have an accepted contract with an inspection clause, it’s not going to be a great strategy to put marginal repairs on the inspection notice. The gutters may be clogged, but if you ask them to be cleaned the seller is going to tell you to take a hike. If a window seal is broken, and they disclosed it, don’t expect it to be fixed. Again, there are other people who wrote offers and the seller is looking out for themselves.
Another Offer Got The House
If another offer got the house, move on. It wasn’t meant to be. Sometimes, we can learn a lesson, and other times there’s nothing to be learned. Writing a stronger offer on another house with multiple offers should be a given by this point, but at the same time, some houses don’t warrant a stronger offer even if there are multiple offers, because you wouldn’t be happy in that house. Let some other buyer be left holding the bag on a house that won’t have any equity for a decade.
Thank you for educating us about the home purchase
process..
Thanks for taking the time to read it 🙂
I’m curious what your take is on real estate ethics. To be honest, I don’t understand what “unfair to the process” could mean, unless you see home sales as a stort of independent moral act, instead of a transaction between people. Rather, it seems unfair to both the buyers and the sellers not to disclose the reality of what offers exist, both so the seller can get the best price and so the buyer willing to offer the best price knows they’re not overpaying simply because they do not know they’re competing against themselves. It really seems that agents interested in quick closes and clients under high pressure to accept/offer *whatever* they are able to is the only real winning position.
Thank you for your comment Bob. I think of real estate ethics in terms of the industry. So, we don’t particularly care about ethics in investing, or manufacturing, for example. Within the framework of real estate ethics, the question follows, “to whom do I work for?” If I work for the seller, my job is to get the best situation possible for my seller…that would be a sale of the home…..and believe it or not, I’ve seen sellers many times take offers that were not the highest dollar amount, but had better terms for them and their situation. If I work for the buyer, my job is to get the best price possible for the home based on an arm’s length transaction. Representing the seller, it would be unethical to tell buyers agents that I have offers when I do not have any, and so I don’t. To tell buyers agents exactly what my offers are is not ethical to my sellers. I’ve had many calls over time from buyers agents asking me for the number to put on the paper to get the house. That’s unethical. There’s really nothing “fair” about the real estate market.
As far as high pressure for quick closes…it really depends on the situation. Some sellers don’t care when something closes, as long as it does. As an agent, I don’t really have an opinion, I work to get whatever the client wants. A “quick closing” is usually a term thrown around when a buyer agent is trying to get a house under contract…Another one would be “all cash deal”…which really doesn’t matter as the seller is looking for a check, they don’t care where it came from. Time creates pressure in contracts. Ultimately, the best represented clients will fare the best as those agents know how to use time to their benefit, where some greener or more desperate agents might freak out.
Is there a requirement for the selling agent to tell the buyer that there are other offers on the table? For example if I submit an offer at noon and the seller gets another offer after that do they have to notify me? Or if my agent didn’t ask before submitting my offer does the selling agent HAVE to tell us that they have also received another offer? I understand that they CAN as a negotiation tactic, but are they legally required to?
Hi Lisa, Thank you for your question! I can only go by the state in which I’m licensed for, which is Missouri, and I can’t provide any legal advice as I am not a lawyer. Here is my answer. Is there a requirement for the listing agent to tell the buyer that there are other offers on the table? No, but common professional courtesy would be as the listing agent you tell the buyer’s agent about the existence of other offers. Is there a requirement for the listing agent to inform the buyer’s agent after an offer has been submitted that a new offer has arrived? Common professional courtesy would say yes, unless it’s already known that there are multiple offers on the property. It would be strange for your agent not to communicate with the listing agent to inquire about the existence of any offers BEFORE you submitted your offer, because the contents of your offer might be adjusted if you were aware of other offers. The listing agent only has an obligation to their seller. They are not obligated or legally required to tell you, the potential buyer about the existence of any offers.