Should a seller disclose that he/she has multiple offers?
Written by: Andrew Goodman
In one word, YES!
When selling a home, most sellers are looking to maximize their investment. To do that, the seller would want to get top dollar. The theory is that if a seller receives multiple offers, they will receive true, and possibly above, market value of their home (whether it was above list price or not).
The reason I am bringing this is up, is that I was just involved in a situation where the seller received multiple offers and he/she elected not to let their agent disclose that to the agents who were submitting offers on behalf of their clients. If I had been representing the seller, I would certainly have made sure the seller knew what he/she could be losing.
If a buyer doesn’t know that there are multiple offers, they likely think that they can negotiate with the seller since there isn’t any competition on the home. Quite contrary, the buyer may actually elect to submit an escalation clause to go above a competing offer and escalate the price of the home if they know about the other offers.
The disclosure of multiple offers does a few things. First, it makes the buyers aware that time is of the essence and they have to submit their offer asap. It also lets them know to submit their highest and best offer. However, most importantly, it develops fear in the mind of the buyer. It makes the buyer fear that they may lose the home to a competing offer.
In my opinion, the fear of loss is what drives real estate. From a buyers prospective, it is the anguish that another buyer could enter the equation and snatch the home out from under them. From a seller’s prospective, it is the fear of the unknown. It is the fear that they may not be able to get a better offer than the one in hand and therefore may lose the offer they have already received.
To me, it doesn’t make sense for a seller to choose not to disclose that there are multiple offers, but ultimately, it is the sellers choice.
As a Realtor® representing a buyer, it makes me second guess the listing agent. It makes me think that the listing agent has an unrepresented buyer and they would rather sell it to that buyer versus a buyer with another agent so they can make more money.
When I am in a situation where there are competing offers and one of the interested parties is unrepresented, I disclose that to all parties. I want everyone to have a fair shot because if I don’t, I am not working for my client nor am I looking out for their best interests.
Be sure to know your agent. Be sure to trust your agent, and most importantly be sure to be involved in the process so you know that your interests are being taken care of. After all, you are hiring an agent to protect your investment not their wallet.