Yallingup Wood Fire Bread - Yum!!

Swings Taphouse - Wine on Tap

The Hairy Marron - Bike Trails Margaret River

Margaret River's Underground Pizzeria

White Elephant Beach Cafe - 365 Days a Year!

Brew Shack - Hidden Coffee Shop Margaret River

Two Offer Situation

They're every buyer’s worst enemy and every seller’s best friend!

As real estate consultants we are ethically obliged to act in the best interests of the seller. After all it is the seller who pays the commission!

So we are instructed to get as much as possible for our sellers, working within market conditions and seller’s expectations or requirements. For example if we receive a low offer and know that the property is in fact worth a lot more, it would be negligent of us to accept that without question or encouragement to at least meet market value, and then present to our sellers hoping they will just accept. Sellers employ us on contract to sell their properties and for us to do our best for them.

So when a two offer situation occurs it generally means that the seller is in an advantage (not always the case!) as two buyers will be competing against each other. There is a lot of confusion about how this situation unfolds and a lot of distrust from buyers to consultants. The scenario can and should only work in one way and most often the case there is always a disgruntled and upset buyer. Just how it works unfortunately.

If buyer A writes up an offer and gives it to the consultant and the consultant is aware of another offer coming in, they advise buyer A that there might be another offer coming in – you will be advised if this is the case. In the meantime buyer A’s offer will not be presented to the seller until it is confirmed whether or not Buyer B is presenting.

Even though Buyer A has presented an offer first, it does not mean that first in best dressed. Remember the consultant is acting for the seller, so in this case, the consultant would wait until Buyer B finalizes that decision. Now of course you wouldn’t sit around for weeks on buyer B, this delay would only be happening if another seriously interested party was communicating to the consultant and advising of such. If there is no other talks of offers, then Buyer A’s offer would be presented.

So Buyer B writes up an offer but is advised that there is another offer also. So the consultant would say to Buyer B, you have one chance to present your one and only best offer. So buyer B would put down their best price, deposit, finance period, settlement date etc. Then Buyer A is advised that Buyer B has written up their one and only best offer, and that Buyer A now has the opportunity to adjust their first offer knowing that a second offer will also be presented. Buyer A may adjust their offer or be comfortable with what they have already offered.

Then both contracts get presented at the same time to the seller and the seller decides which offer they like best.

The seller’s choices are to

a) accept an offer and reject another

 b) reject one offer and counter the other or

c) reject both, but unlikely as the seller may as well negotiate on one and see if they can get the price they want.

At no time is the consultant allowed to communicate to the buyers what the other buyer’s offer is. Such an approach would be deemed to be unethical to the buyer and sometimes referred to as a ‘dutch auction’.

As you can tell it can be a little complicated and when emotions are high, it is hard to trust that the consultant is in fact doing the right thing. But if you do miss out, you have every right to ask why the other offer proceeded and yours didn’t. If the offer was subject to finance, the sale price cannot be disclosed until the contract is unconditional but the consultant would be able to say – “they paid more than you” for example and you could get clarification at a later date if you wished.

Why not disclose the sale price til unconditional? Again this comes down to working in the seller’s best interest. That offer may not come together as the finance might fall through, and if we publicise what the seller once accepted, other buyers wouldn’t be prepared to offer any more as they already know what the seller has previously accepted. In the future a buyer may inspect the property and offer more, as they believe it’s worth more to them or the market has changed.

If you have any queries regarding this and would like to discuss it further I would be happy to assist. Send me an email or give me a call.