I work in one of the smaller real estate boards in Ontario, mostly smaller towns and rural areas. The pace tends to be a little slower than it would be in the Toronto Real Estate Board, and the situation of multiple offers on the same property does not happen with the same frequency as it would in larger, more urban boards where certain properties would be more in demand. In the last four years I have been involved in about 15 multiple offer situations, mostly representing a buyer. I have had only one listing that has attracted multiple offers. All but one of the multiple offer situations involved two offers, so that's mainly what this post is about.
I have noticed that there is quite a difference between representing buyers who have the first offer in and representing buyers who have the second offer in. Many agents know that sinking feeling that they experience after submitting a carefully crafted offer only to get a phone call a few hours later telling them that another offer has been submitted and they are now in competition. It's very much like suddenly having to switch gears. The agent will then have to call their clients and inform them to bring their best offer forward.
It isn't as easy as it sounds. I will have spent quite a while preparing the clients for a negotiation with the seller, and will have hashed out all the fine points that will hopefully lead to a fair and equitable agreement of purchase and sale. All of a sudden I have to call them up and basically tell them to disregard much of what I have previously said, there's another offer on the table, and we might have to go higher and make less demands of the seller.
It's much easier putting together an offer when we already know there's another offer in play. The trick is to try and determine what's important to the seller and address those issue. Often it's not just a question of offering more money (than we are guessing the other party has offered). Sometimes it's apparent that the seller is in a financial pinch, and a quick closing will be a priority. Sometimes a much higher deposit will influence a seller into thinking that my clients may be more financially stable and therefore more likely to be able to complete the deal. Sometimes elderly people on a rural property will have a few worries about cleaning up the junk that has accumulated over the last 40 years, so inserting a clause relieving them of that responsibility will seem like a huge relief to them and give my client's offer the advantage. A nice clean offer with few clauses is always preferable to a seller, so that's the route to take.
When writing an offer, naturally the concerns of my client have to be addressed, and going into a negotiation without any competition means that I can adress all those concerns. Being in competition with another offer gives a lot more bargaining power to the seller, and knowing that there's competition from the get-go, a smart buyer's agent will put together an offer with this firmly in mind, which is an advantage that the first agent did not have. It is difficult trying to convince people to remove clauses that they have put into an offer for their own protection, it often makes them worried, and quite often less enthusiastic about the prospect of buying the property.
Multiple offer situations can be a little nerve-wracking for clients and agents. It's difficult when you have clients who are very enthusiastic about a property and then lose it to someone else, it's disheartening. Unfortunately there can be only one winner, and I would much rather that the winner be my clients. I wish I could guarantee that every time, but sometimes it just doesn't happen like that.