Suppose you’re selling and are lucky enough to receive more than one offer. Then imagine that you’re even more fortunate. All of the offers great but are so similar that you can’t decide which one to pick. One option is to accept none of the offers and ask the parties to resubmit their offers. This can be off-putting, however. After spending time and effort to put an offer together, most buyers want to hear a more definitive response back from the seller.
Another option is to use a multiple counteroffer. This allows you to counter more than one offer at a time. But, multiple counteroffers need to be done very carefully. Otherwise you might end up selling your home to more than one buyer.
State laws and local custom differ from place to place regarding the sale of residential real estate; so be sure to check with your real estate professional before issuing a multiple counteroffer. The multiple counteroffer used by the California Association of Realtors includes a disclosure that puts the buyer on notice that the seller is countering more than one buyer. It also specifically states that if the buyer, or buyers, accept the seller’s terms, the multiple counter must be re-signed by the seller to be binding. This resigning requirement protects the seller against selling his home to more than one buyer. So, the final say on which offer will prevail rests with the seller.
Furthermore, the seller not only needs to re-sign the multiple counter, the buyer must also actually receive the counter re-signed by the seller for it to be binding. Up until that has occurred, the buyer and seller are under no obligation to buy or sell the property.
Let’s say you make an offer to buy a house and there are three other offers. The seller decides to counter the two best offers. You sign the multiple counteroffer and your agent delivers it to the seller. The seller re-signs it, but before you have received the counter re-signed by the seller, you see another house that you like better and withdraw your signed counteroffer. As long as you withdraw before you receive the counter re-signed by the seller, you are under no obligation to buy the property.
HOME SELLER TIP: This is another risk of using a multiple counteroffer. You can risk losing a good buyer who decides to buy something else because he figures that his chances of winning your multiple counteroffer competition are slim. Multiple counteroffers can also backfire if the seller is perceived as being too greedy.
In one multiple counteroffer situation, the best buyer backed out because the seller asked for more money. The buyer had made an offer that was well over the asking price. The seller was left with a single buyer who had made a lower offer. When this buyer responded to the seller’s multiple counteroffer, he lowered his price since he was aware that the other buyer had dropped out. If the seller had simply accepted the best offer, he would have come out ahead.
Before making multiple counteroffers, consider the risks. Make sure your counters protect you from selling to more than one buyer. You only have one property to sell. If more than one buyer thinks he has the right to buy it, you could be tied up in a legal mess and no sale at all.
THE CLOSING: Make sure that you don’t jeopardize an excellent offer just to see if you can up your profit a bit. You could end up with nothing.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers,” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
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