Are Multiple Offers Really Good?

Many sellers love the thoughts of multiple offers on their homes.  This does happen often, when the housing market is going strong.  When there are not enough listings of homes to meet the demand – it’s quite possible to receive multiple offers.  When this happens, a bidding war can often ensue, driving up the price so that the sellers get more than they were asking for.  It seems like a great thing to hope for, but is it really?

Disadvantages of Multiple Offers

Buyers Don’t Want to Fight!

One of the most important disadvantages of multiple offers is that many potential buyers are going to be turned off by the thoughts of fighting it out with bids.  They just want to buy a house and move into it, and get their lives moving.  They don’t want to spend weeks making offers and counter offers to try and get this one particular house – especially when it’s easy to make another offer on another house.

While some bidders with a competitive spirit and a deep wallet might want to continue the war until they come out with the deed – this bidder is rare.  Most likely, one or more of the bidders is going to walk away.  Another issue is that as the bidding process continues, it draws things out and potential buyers have time to second guess themselves.  Things that looked charming at first may soon seem not so wonderful about the house – and they may lose interest.

Buyers Don’t Want to Overpay!

Most of the time, buyers are looking for a home that has most of everything they want – but with the lowest price possible. There are those potential home buyers out there that have all the money in the world and they’re not going to stop looking until they find the perfect home for them no matter what the cost is.  However, this is not representative of the majority of home buyers.  The majority of homebuyers do not want to overpay for their next home.

When a bidding war ensues, if things are going strong, these potential homeowners are going to see that it’s quite likely that they’ll be overpaying.  Even if the house is wonderful, these people are not going to want to pay thousands over what the original asking price was just to beat out another bidder.  If you’ve underpriced the house in the first place, you may leave money on the table.

For the most part, people wish for multiple offers and everyone wants to get the most from the house they have for sale.  However, as you can see from the issues above – it’s not always a good thing.  In one particular example, a seller asked her agent to list the home and then have any offers wait one week unless the offer was full price or better.  Of course, the seller was hoping to see a bidding war.

There was one offer on her home early, but she refused to look at the offer until that week had passed.  When the week had passed, that offer was the same and only one made on the house and she nearly lost that offer.  The point is that the more time that passes, the easier things are likely to change. Sometimes, one decent offer is much better than having a bidding war commence over your home.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.