Bidding wars: what to do when you’ve got multiple offers
by Housesimple on 3rd March 2018
Congratulations! Your house is in demand and buyers are queuing up to make you an offer. But how do you use their enthusiasm – and your home's popularity – to your advantage? Getting the most out of a bidding war is all about nailing down the details, working out the pros and cons of each offer, and maximising your leverage. Read on to find out how it’s done.
Consider caveats and clausesThe highest offer isn’t always the best
.You need to look at the fine print to see what buyers really expect. No deal is done until the contracts (or missives, in Scotland) are exchanged. Offers that are ‘subject to contract’ could be revised downward or withdrawn completely if the buyer is not satisfied with the survey results.
Check the length of the chain
According to Which? 28% of people have had a property sale fall through. What's more, a good proportion of unsuccessful sales relate to a problem with the chain. If your best offer is coming from a buyer in the middle of a chain, the timing of the deal will be subject to a series of other purchases going through without a hitch. And there are no guarantees that will happen.
Be sure about the buyer profile
Avoiding the chain isn’t the only consideration. You need to decide which type of buyer is best for your situation. For instance, if you’re considering selling to a first-time buyer, you will escape the chain but face a whole new set of potential pitfalls. Before accepting their offer, make sure they have a decision in principle on a mortgage. If you’re worried about buyer finance, you could consider prioritising a cash buyer, if you’re lucky enough to have an offer from one.
Talk about timing
If you need to move quickly, you’ll want a buyer who’s willing to do the same. But be careful when revealing these details – if you give too much away you might weaken your negotiating position. In contrast, if you’re in no rush, you can sit back and wait on multiple offers or encourage higher bids from those who need somewhere fast.
Use your leverage
The thing to remember about all of these risks is that, if they’re handled correctly, they’re good leverage. You can take them back to the buyer to explain why you’re unsure about accepting their offer. When you use them to negotiate like a pro, they can actually bring you reassurances, or even a higher offer to sweeten the deal.