Kurt Thompson

Massachusetts continues to suffer from a severe lack of housing production and therefore a lack of housing inventory to satisfy buyer demand. One of the more significant effects of the limited housing supply is that it results in especially competitive buying situations. This, in turn, tends to result in listings that receive multiple offers to purchase the home. Multiple offer situations can be one of the thornier situations for buyers, sellers and their respective agents to navigate.

As Realtors know, there are almost never simple answers to complex situations and multiple offer presentations and negotiations are nothing if not complex. Although there is not a single, standard approach to dealing with multiple offers, there are fundamental principles to guide Realtors.

First and foremost, Realtors must recognize their duties to their client as primary. The Code of Ethics requires Realtors be honest with all parties and potential parties. Open and honest communication is crucial to a successful transaction.

Clear Communication is Key

Like most things, proper planning is key to avoiding potential pitfalls. Successfully navigating a multiple offer situation requires listing agents and buyer agents to engage with their client at the outset of the relationship to discuss how the situations will be handled should they arise. Listing Realtors know they need to have a discussion up front about how to deal with counteroffers. For example, does the seller want to accept the “best” offer that initially comes in, invite all potential buyers to submit their best and final offer or counter one offer while setting the others to the side? These are just some of the options that a seller will need to choose from.

During this time, Realtors representing buyers understand they need to prepare their buyer for a competitive market. Realtors will review potential negotiation strategies at the outset so that when it is time to submit an offer, buyers can make an informed decision on how to move forward, quickly. Should the buyer submit a low offer, offer more than the seller is asking, or even use an escalation clause? There is far more to an offer than just the price. Realtors can walk the buyer through the other components that go into offers such as contingencies and closing timelines. Having these discussions in advance will provide the buyer with the needed information to decide on a path forward.

In the end Realtors and their clients must recognize that in multiple offer situations only one offer will result in a sale and one, or more, potential purchasers will be disappointed that theirs was not accepted. While little can be done to assuage their disappointment, fair and honest treatment throughout the process, coupled with prompt, ongoing and open communication, will enhance the likelihood they will feel they were treated fairly and honestly.

Kurt Thompson is the 2020 president of the Massachusetts Association of Realtors and a broker with Keller Williams in Leominster.