If you’re selling your home during a “seller’s market”, you may well find yourself dealing with multiple offers. This is an ideal situation to be in, but you need to know how to handle these offers. The following tips should help:
Have your home inspected
You should do this before you even put your house on the market. If you haven’t done this, you should do it now. If it turns out that major work is required on your house, you can either have the repairs done, or lower your asking price. Getting a home inspection will allow you to be completely honest about the condition of your house. Otherwise, you could risk a lawsuit.
Honesty is the best policy
It’s OK to talk with a prospective buyer. But don’t make any deals without telling your agent. After all, you’ll still owe your agent his commission. Also, going behind your agent’s back could lead to a lawsuit.
Don’t try to make a killing
If your agent finds you a qualified buyer and you turn down a reasonable offer from that buyer, you’ll owe the agent’s commission anyway. The agent did, after all, keep his end of the bargain. Be fair. It’ll keep you out of legal trouble.
If you’re not interested in an offer, say so. Don’t use unappealing bids to drive up competitive bids. Agents will talk, and you’ll notice a sharp decline in the number of showings your home gets.
Before you open any bids, let all prospective bidders know whether you are expecting other bids. This may nudge bidders to lead with their best offers. And, it lets them know where they stand.
The quick scoop on earnest money
Be very wary if a bidder wants to make out his check for earnest money in your name. Consult a real estate attorney. If the deal falls through, or a complication arises with your property, the ownership of the earnest money could be in question.
This type of situation should be handled by an expert. The listing broker would be an excellent choice. Then, if there is a dispute, it’s up to the broker to decide how to divide the check. The broker would also be the one to deal with any legal challenges.
Another benefit to letting the listing broker handle this is that they are in a better position to work out a compromise between the seller and the buyer. If necessary, a listing broker could file what is known as an “interpleader action”. This action forces the courts to make a determination in case a compromise can’t be reached between the buyer and the seller.
Beware of this practice
Naturally, when you get an offer, your agent will spread the word among his colleagues. That’s because it lets the firm’s buyer agents stir up competition. Just make sure that your agent isn’t revealing the amount of the offer. This is known as “shopping” the bid, and the agent could face a legal reprimand for doing so. He could even lose his license.