The multi-offer process

 

In a multi-offer process, all prospective buyers are encouraged to submit their best offer and the seller can choose whichever one looks most attractive. This process is often used when property is for sale by price by negotiation, or at an advertised price. It can also be used if a property has failed to sell at auction.

How does a multi-offer process work?

This process is designed to give all potential buyers an equal shot – it is not like an auction​ where an agreement is automatically formed with a successful bidder. The seller is not obliged or required to accept any particular offer in this situation; they may accept one offer, reject all offers, or choose to negotiate further with one particular party.

When is a multi-offer process used?

Multi-offer processes can differ from agency to agency, but they can only be described as such when there is more than one offer in writing – a real estate agent is not allowed to pretend that there are genuine competing offers if they do not exist.

It can also be used if a property has failed to sell at auction or in a tender, auction or deadline sale process if a prospective buyer has submitted an early offer. In these cases, an agent may initiate a multi-offer process where all interested parties are invited to submit their best offer.

What do you need to know?

Whatever the circumstances, agents are expected to clearly explain the process and any relevant paperwork to all prospective buyers and sellers. All the offers are presented fairly and a real estate agent must not act in a way that favours one over another. 

Some real estate agencies will hold on to the first offer they receive while they check for others, effectively resulting in a multi-offer process. 
This may feel unfair if you think that your offer should ‘win’ because it was in first, the agent’s primary responsibility is to get the seller the best outcome, considering both price and any conditions from buyers such as settlement date or being subject to finance. 

If a potential buyer submits an offer before a multi-offer process starts, the agent must give them a chance to review it. Similarly, if as a prospective buyer you are told that a sale is a multi-offer process but the situation later changes to a stand-alone offer, you must be told about this and get a chance to review your offer and submit a new one.

How to give a multi-offer process your best shot

  1. ​Do as much homework on a property as you can before making the offer so you minimise any risks. This may help you eliminate some conditions and help you determine what your ‘best’ offer will be.
  2. When thinking about the offer, consider how you would feel if you found out that a higher offer had been accepted ahead of yours. If you think you would be prepared to pay more, then it’s better to make that decision at the start than when it’s too late.
  3. There is often confusion around timeframes in a multi-offer process, especially if a potential buyer thinks they are the only one interested. Talk to the real estate agent marketing the property to make sure you are clear about any deadlines and about the sale process as a whole.
  4. Remember that the highest offer is not always the winner. If you were a seller, would you prefer a higher offer or one with fewer conditions? It’s impossible to guess what kind of offer will suit a seller’s particular circumstances, but it’s a good idea to eliminate as many barriers to a swift and easy sale as you can, while still ensuring you have covered any areas of risk to yourself.
  5. Want to get in early? Include an expiry time on your offer. This means the agent must present the offer to the seller so they can consider it before it expires. 
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