What is a multiple offer situation?
Multiple offers are when two buyers are interested in the same property and are willing to put an offer in writing to the seller at the same time.
This can be a very unnerving process, not only for the buyer and seller but the listing agent.
Invariably this process can lead to one or more parties feeling let down or that they have missed out. Hindsight then kicks in and they want to start the process over again!
When a property is on the market under private treaty (not auction), the correct multiple offer process involves the agent notifying all interested parties that they are in a multiple offer situation, usually by means of an Acknowledgement of Multiple offers form – see attached
The form allows all interested parties the ability to put forward an offer that is their best offer, acknowledging the fact that there may not be an opportunity to negotiate further.
What happens next?
The seller is then presented with all offers. If there is one offer that is more acceptable than the others, the buyer will then be requested to move forward to contract.
If the offers are similar in nature, the seller may request that the agent liaises with the buyers and requests them to reconsider their offers – it may mean, an improvement on price or the terms of the offer.
If all buyers wish to keep their offers the same as originally presented, the seller has the option to accept one of them or decline both.
Either way, the process is designed to be a fairer method than in previous days when it could have gone to a “Dutch Auction”.
Information provided by the Real Estate Institute of Queensland warning agents of misleading conduct when a multiple offer situation occurs
Agents have an obligation to immediately inform their seller clients of all offers, act in accordance with instructions from their seller clients and to obtain the maximum sale price for the property. However, in obtaining the maximum sale price for the property, agents must treat potential buyers honestly and fairly and not engage in misleading or deceptive conduct and/or unconscionable conduct. Conduct which may be considered misleading or deceptive and/or unconscionable can include, but is not limited to:
- an agent playing potential buyers off against each other in an attempt to draw out further offers and drive up the sale price; and
- an agent advising a buyer of the existence of a higher offer in circumstances where a higher offer does not exist, has lapsed, or has previously been rejected by the seller.
At the time of writing this article in July 2021, the market in Queensland has been at an all-time high and, multiple offer situations on the same property, are occurring more frequently than in previous years so it is vital that buyers are aware of this process.
Tips and strategy for winning multiple offer situation’s:
- Put forward your very best offer, your walk away price/conditions
- Build rapport with your agent and let them know you are keen for the property – provide details of your offer on an urgent basis
Agents must act in accordance with the Property Occupations Act and ensure that they comply with their obligation to both the seller and the potential buyers.
