In a bullish real estate market, any homeowner can expect more than a few offers for their homes. It’s a classic example of an economy uptrend, and there will be an oversupply of homes for sales. In such an event, the demand for quality homes will be strong and only the best will gain traction during such a good season. Of course, home prices will spiral upwards and that, in turn, will create an opportunity to spark a “bidding war” between sellers. But owners can expect multiple offers at any given time in such a time of good economic growth.
So how does one react to such multiple offers?
Well, a seller with multiple offers can basically set the best possible terms and prices for a home sale. They can have the luxury of cherry picking any offer.
So how do I make sure my home here in this district or location can and will attract multiple offers? My recommendations will be, on the assumption that your home is in good condition to start with, is to market the house at the right price. So, naturally, the next oblivious question is, what is the right price? For that, I would suggest that you consult a few realtors in your area to give you an approximate price for your home. Based on that price you can either mark up an additional 10% to it to start your marketing or selling price and still be in a situation to negotiate further if any buyers insist on discounts. With this move, multiple offers should come rolling in soon.
As you market and wait for offers to come in, you can observe the prices if they are going up or down to gauge the market sentiments. Price according to the market sentiments, sometimes it works and other times it may not.
If you insist on a high price, or you may end up waiting for months for the market to catch up with your intended price. And your house may be listed for months and used by unscrupulous realtors as a showpiece to other buyers to entice these buyers to buy other houses on the market that are priced to sell.
So how do we get our house listed?
Well, you can get an experienced real estate agent and make sure they have access to a Multiple Listing Service. Normally most agents do have access to Multiple Listing Service (MLS) and can get your house listed within 24 hours.
But some experienced real estate agents tend to hold off a listing from being listed in the MLS for a day or two and they may probably sell off the house within a day or two just by having an open house in that vicinity.
Of course, in the best interest of the owner’s, listing a house in the MLS system will get the most exposure and generally tend to get a much larger target of potential buyers coming your way.
Does the highest price secure the deal?
Not really, I would suggest that you look for better and qualified buyers who can offer more attractive terms. For example, if they, the buyers have a large amount of ready cash to put down as down payment or the buyers have a pre-approved loan done up already. Having these two terms alone will help you sieve through many other buyers who may not have the full resources yet to purchase your house outright.
You don’t have to accept the highest price but what if a low-priced offer can give you peace of mind, why not? Or if you still think that you need a better offer, why not you give a counteroffer to one or two of the buyers and see how these perform?
In some states or countries, you may incur a full commission to be paid out to a real estate agent even if you don’t sell your home off. In other states or countries, you don’t pay the agents till you have officially signed over the house and you have collected the monies from the buyers.
There are cases of a Seller getting a high offer from their agent almost immediately after wanting to sell, and the seller didn’t want to accept this offer and said they wanted to wait a week to see all the other offers that may come.
Sometimes, the “first offer” is the best offer, why simply because this buyer may be in dire need of a house immediately and knowing the market sentiments may offer a good price but not a high price.
And if you don’t accept this ‘first’ offer, anything can happen, including this buyer may lose interest or they may offer a lower price next time since they too are observing the market and your house since they were keen on it in the first place.
Some seller even had this question, ‘What if we had an open house and nobody came?’ That’s a risk you take when you want to wait for the best offers to come in.
Today, most agents use a smart mobile phone for all communication purposes for sales transactions, which means all offers and counter-offers are recorded on their phones. This is an acceptable mode of communications for real estate offers in some countries. But in some other countries, they still use faxing to accept offers and counter-offers.
When and how do you stop such offers from coming before you decide?
Well, most owners will specify a time when to conclude all offers, eg at 4 pm on the 6 Nov. Known as the “cut-off” time and with that the real estate agents will notify all interested buyers about this cut-off time. Partly the reason for doing this is to hurry buyers into submitting an offer before offers close, it is basically using the “Urgency” or “Scarcity” marketing tactics to entice buyers into submission.
How do you evaluate which offers to accept?
For this, once all the offers are “in”, the agents will present all offers to owners, with the highest offer up at the top of the stack. Based on price and terms all offers will be evaluated equally.
Of course, “in-house” offers are directly presented to an owner, but the owners still have the final say on which offer they will decide and close the bidding exercise. But if an “in-house” offer is selected based on price and terms then chances are, the owner will probably present the real estate agent with an extra percentage of commission.
The owner must sign the offer letter and present it back to the buyer to officially close the bidding exercise. Now the buyer has the final say, in that if they do not submit the “accepted offer” to a lawyer to seal the deal, the deal can still “burst”.
For example, once the deal is signed, the buyers need to be invited to inspect your house once before the takeover.
What if during this inspection, the buyers insist that you fix some issues in our house before they take over. Now you as Seller can decide to adhere to these requests if they are minor or if they are absurd requests then you as the seller can decide not to adhere to them and that will leave the buyer to exercise or not exercise the deal. This is the only way a seller can get out of a signed contract.
But what if a buyer had submitted two offers to two different sellers at the same time?
Yes, some buyers do this, submitting two offers to see which offer “sticks” and decide if they want to exercise the deal later. If a buyer does not exercise, then they tend to lose the booking “option” fee of 1% normally to sellers and this seller has the right to resell their homes again.
What if there are counter-offers by buyers to a seller?
Once a bidding exercise is closed, it’s unlikely that can happen.
Once a seller has accepted an offer and refuses to go ahead with the deal, the buyer has the right to take legal action against the sellers to enforce it as this is a legal contract signed by both sellers and buyers.
What if after you have closed the bidding and you cannot decide?
Well, if you cannot decide then you might want to keep marketing your house in the market for a longer period and chances are your house will be ignored by potential buyers who think the house has been too long in the market. Or buyers may think that you are asking “unrealistic” prices or know that your house is not in good condition and avoid it.
My advice is to listen to your experienced agents on pricing and don’t let this happen. If it is priced correctly and is in good condition, or talk to your estate agent and take immediate corrective action or you will suffer later.
Lastly, do not sign more than 3 months of listing agreement with any real estate agent. This is to help you evaluate your agent’s ability to sell your house at the stipulated price within this 3 months and move on to another agent for the next 3 months.
If there is any dispute with a real estate agent on his/her marketing or price issues do not go into a quarrel with them, rather get in touch with the immediate managers of this agent and resolve them amicably. Sometimes a disgruntled agent may use take things into their hands and cause problems for your house sales.
But right now, I would highly recommend Gem Residences to be considered in a bullish real estate market in Singapore.
Hope the above write-up can help you with your house sales. All the best.