Selling in San Francisco: Managing Multiple Offers, Part II

When a seller receives an offer on their property, it can be managed one of four ways: accept, counter, reject or ignore. Managing multiple offers is essentially the same, with the added choice of responding to more than one offer.

When reviewing multiple offers, it's important to review terms as well as price. Depending on a Seller's situation, the highest offer isn't always the best offer. Cash remains king, and a lower all-cash offer often beats the higher offer with a loan contingency.

Occasionally there is one offer that blows all the others out of the water. We often can see this offer coming before it is submitted. These are the buyers whose eyes light up each time they walk into the house and come armed with a tape measure on their second showing. They become so emotionally committed to the home that they are ready to go to exceptional lengths to become its owners.

Other times the offers are close in price but the lower offer has stronger terms. In this instance, we often recommend the seller give the lower offer an opportunity to match the higher offer.

A third option is to counter more than one offer on price and/or terms. The objective here is to draw forth an offer that delivers the best price and terms possible. In a 'hot market' this multiple counter strategy could draw buyers to counter back even higher. This scenario doesn't happen as frequently now-- it can alienate a precious buyer pool and the seller runs the risk of losing the strongest contender.

When there is more than one offer, we usually advise the seller to put the second strongest offer into back up position. In our uncertain market, this is a prudent strategy. It leaves a Seller a second-choice option. A back-up offer also tends to keep the first-place buyer in line, and less apt to attempt a negotiation for credits during escrow.