Reader Question: We are selling our home on our own. We have had little activity for over two months, and now we are expecting multiple offers on our for sale by owner home. Please help!
Monty’s Answer: When you are selling your home without a real estate agent, the possibility of two or more parties making offers on your home is a good position as a seller. However, it can become complicated, depending on how you choose to proceed. When two or more parties are vying for your house, the competitive environment can evoke strong emotional responses. For this reason, it may be helpful to review your options and the pros and cons of each of them.
There are no for-sale-by-owner rules. You are not subject to regulations and laws to which real estate agents are bound. As it applies to real estate, agency law has evolved over the past fifty years or so from “caveat emptor” – let the buyer beware, to “caveat venditor” – let the seller beware. The degree to which states have embraced caveat venditor varies. Here is an article on DearMonty that suggests agency laws do not function as intended.
Sellers may wish to follow or reject based upon the circumstances encountered in a situation that can change by the minute. You can control the fluidity with your actions to treat even the unsuccessful buyers fairly. Some buyers may still be disappointed.
>Under no obligation to negotiate.
>First offer presented has no priority over subsequent offers.
>Under no obligation to accept or negotiate with the highest bid or any offer.
>No obligation to accept an offer at your asking price and terms.
>No obligation to inform a buyer of the existence of other offers until a multiple counter offer.
>Not bound to accept your multiple counter-offer until you countersign one with a binding acceptance.
Common multiple counter offer options
- Reject all offers and ask for a best and final from all buyers – Pros: a.) increased chance of receiving an acceptable offer. b.) equal treatment of buyers. Cons: a.) may turn off a buyer.
- Reject all offers and ask for the best and final from one or two buyers – Pros: a.) reduce workload. b.) postpone perceived weak offers. c. focus on favored or most likely. Cons: a.) may eliminate the best buyer.
- Multiple-counter all offers with the same price and terms – Pros: a.) equal treatment. b.) may receive an even higher offer. c. may finalize the offer process. Cons: a.) may be losing equity.
- Multiple-counter certain offers with different prices or terms – Pros: a.) incentivize a favored buyer. Cons: a.) may be losing equity.
- Reject all offers but suggest all increase their offer without mention of best and final – Pros: a.) increased chance of receiving an acceptable offer. b.) equal treatment of buyers. c.) may prolong buyer interest. Cons: a.) may turn off a buyer.
A seller’s option over another likely depends on a variety of individual factors unique to each situation. This list could likely include more options. Numbers 1 and 2 are not actual counter-offers because you are simply rejecting all of them. They are easy, fair, and clear, but they may not fit the seller’s situation.