Pros & Cons of Disclosing the Existence of Other Offers on Your Home
When sitting down with sellers and filling out our listing agreement, sellers sometimes get caught off guard by the question of whether or not they wish for me to disclose the existence of other offers on their home to inquiring buyer agents. For most sellers, it is a slam dunk, “YES!” However, not all sellers think disclosing multiple offers to potential buyers is a good idea.
There are two schools of thought on whether or not to disclose the existence of other offers. The argument against disclosing the existence of other offers is that some buyers would take it as discouragement from writing an offer. That’s a legitimate thought. Some buyers just don’t feel competitive enough to jump into a bidding war. The other thought is that buyers literally have no idea what situation they are jumping into, so bidding wars may be unlikely even if there are multiple offers. If you don’t disclose the existence of other offers, are you even going to get an offer above list price if every buyer feels as though they are the only offer?
The argument in favor of disclosing the existence of multiple offers is that you are letting buyers know they are entering a competitive situation and that they need to put their best foot forward. They aren’t blinding entering a pile of offers. Buyer agents well versed in these situations know that means bringing the highest and best offer up front.
During my listing appointments I often express to sellers that by choosing in favor of disclosing other offers does not mean I can’t do a bit of “air traffic control.” What I mean by that is often times buyer agents will hear there is one or three offers and sound defeated. While I can’t tell them what I have, I will ask what they were thinking of writing. If it’s competitive, I let them know that they should submit that. If it is not, I let them know that it could stand improvement. Ultimately, I work for the seller. Getting the seller the highest and best offer is what I am hired for.
Every buyers agent I deal with in a multiple offer situation hears the same ideas. “You are entering a multiple offer situation. The fewer contingencies the better. Low appraisal guarantees are a great idea. Financing contingency with an automatic expiration would be ideal. High earnest money deposits always make a buyer look serious. And a lender letter that states income and assets have been verified.” Even hearing that speech, you would be stunned how few buyer agents get their buyers to take on the simplest of those ideas. Of course, if there are other needs a seller has, like post settlement occupancy or quick settlement date, I disclose those as well.
Ultimately, all I can do is advise my sellers. I lay out both options and how I help them get the best offers on their listings. The seller has the right to choose to disclose or choose not to disclose the existence of other offers on their home.
The opinions expressed in this blog are those of Chris Ann Cleland, not Long & Foster.