Multiple Offers

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Multiple Offers

One of the most contentious issues in Real Estate is the situation of multiple offers on a property.  In suburbs that are predominantly public auctions, the process is simple as buyers simply bid for the property in real time, and they are fully aware of all other offers on the property as they happen.  The last person with the highest offers wins the property, and everyone knows that they had the same opportunity as everybody else on the day.

In areas like Bacchus Marsh where we are not an auction suburb, the multiple offer scenario creates issues and distinct differences of opinion, both from potential purchasers, within offices and even the real estate industry as a whole.  There are three main methods that are used in this scenario and they are as follows:

  1. One and only offer.  This is where the potential purchasers are told that they have until a certain point in time where they need to submit their best possible offer, along with any terms attached to the offer.  They are told that they may not have a second chance and to place the highest offer possible.  Offers are not disclosed to other parties and the best offer wins.  In this scenario, the winning bidder may be $500 higher than the lower bid, or $30,000 higher!
  2. The second option is using an online auction platform such as the Realtair Auction platform available here at Arbee Real Estate. The online auction platform still allows you to have conditions attached to your offer such as subject to finance, or building and pest, but it goes for a predetermined period of time, with preset minimum increments, and everyone can see the other offer amounts in real time.  At the end of the auction, all offers are submitted to the Vendor along with the terms attached and they may choose the highest offer, a lower offer with better conditions, or none of the offers.
  3. The third option is where all offers are disclosed to all parties and the purchasers can choose to increase their offer to a point where they win the property, where they can no longer afford to continue, or to where they no longer see value.  All parties will have the same opportunity and will have the same information available to them. 

There are pros and cons for each of the above methods, and we would be interested in hearing your feedback on which way you would prefer for a sale to be handled if you were a potential purchaser.

It must be remembered that as an Agent, we are required by law to submit all offers, and we are employed by the Vendor to achieve the best price and for their property.

UPDATE: We conducted a recent survey of our clients and out of 50 responses 4% said they would prefer to only have one chance to offer, 17% said they would prefer an online auction method and 79% said they would prefer to have transparency and negotiate between buyers.

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