Is your offer "a secret" to be kept?

Many buyers are under the erroneous perception that their offer is “a secret” and that in a multiple offer situation, their offer cannot be revealed to other participants.

While many agents may say “I would never…”, reality is that they DO in one form or another in some cases.  The real question is CAN they do it…and not WILL they do it.  Often the seller will counter the most qualified buyer with the higher price of another offer from a less qualified buyer.  Technically they didn’t “reveal” your “offer”, but they used your price as the counter price to a different buyer.  Same difference really, isn’t it?

“Hey, No Fair!” is something we hear often from the buyers caught in multiple offers.  Reality is that the seller does NOT have to be “fair” to all of the buyers, nor does the agent for the seller.  P.S.  If you are thinking that this post is not relevant as we are “in a buyer’s market”…think again.  At least half of my recent dealings in the last 60 days have been multiple offer situations.  The good houses are getting multiple offers,  “good” often translates into best floorplan, best condition, turnkey, move-in ready, needs little or no work…and not best “value” or a “bargain” in need of repairs or updates.

Here are a couple of ways that your offer is “revealed” in a multiple offer situation.  Often it’s more like a guessing game.  Buyer Agent says “If I bring you an offer of less than asking price, does it have a chance.”  Agent for Seller laughs and says, “Hey, I have FOUR OFFERS!, what do you think?”.  Even if all four offers WERE under the asking price (not likely), the agent may still respond in this manner.  Buyer Agent says, “If I cap at $950,000 will that put us “in the running?”  Agent answers “Yes, but more offers may come in, so no guarantees.”  Well at least you found it it was likely more than the ones in hand…maybe.  No guarantees.

The reason agents don’t reveal the other offers before the seller picks one is because they WANT you to go AS HIGH AS YOU WILL GO, and that is their job as the agent for the seller.  NOT because they CAN’T tell you.

When an agent reveals that there are multiple offers, that is also called a “Notice of FINAL and BEST”.  You bring your Final and Best Offer.  NO the seller does NOT have to counter you and rarely do multiple offer situations give you a “counter” or “second try at it”.  YES, the seller’s agent can pick up the phone while considering the multiple offers, call the Buyer Agent who has the buyer with the best credentials and give them a price at which their offer would be accepted and tell them to re-write, right now, and bring a new offer at a better price to the house.

Can the agent for the seller by-pass an offer merely because the buyer does not have an agent?  Yes.  The seller can take the offer price from an unrepresented buyer and counter a represented buyer with the same offer price.  If the seller and the seller’s agent prefer that the best and most competent agent be on the other side of the table during escrow, that is a considerable factor.  Often the seller and the seller’s agent will choose based on the competence of the Buyer’s Agent.  So everything the Buyer’s Agent has said to the Listing Agent WILL be part of the consideration, and having NO agent will also be a factor in determining which offer to select.

OK, now everyone say “NO FAIR!” in unison.  Quite right.  When the seller and seller’s agent are looking out for the seller’s best interest, they are often NOT fair to all or even any of the buyers who are submitting offers.  Don’t be lulled into the idea that you will get a second chance to make an offer.  Don’t be lulled into the idea that other buyers “CAN’T” be told what your offer is.  Don’t expect a seller to “be fair” to you while he is doing his best not to “leave any money on the table”.

Best offer wins.  Often the best offer is cultivated by “shopping” the offers on the table until the best offer is formed…and not the best offer “as submitted”.  If anyone thinks it is “illegal” for an agent for the seller to reveal your offer to another potential buyer…quote me the law that prevents that from happening. 

Rarely, if ever, do agents reveal another offer by physically showing it to another agent BEFORE the seller makes a decision.  Rarely do they reveal another offer in writing.  Rarely do they reveal it in a voice mail message.  Most often these things happen verbally and “off record”…like a whisper in an ear as most secrets are revealed.  So your agent being available by phone during the time the offers are being presented, could mean the difference between your getting the house and your not getting the house.  Often what we do to earn our commission is be available…at the right time…with little or no notice…just in case we are needed.

So when you decide not to have an agent, know that may hurt you in a multiple offer situation.  And when you are choosing an agent, understand that how your agent conducts themselves with and in front of the agent for the seller…can make or break your deal…and your heart.  So pick an agent that is trustworthy.  One that YOU trust…and one that the other agent will trust to help you close, rather than to “get out” of, the transaction.  If an agent makes it very clear to you “that they can help you get out of this”…they may be sending that signal to the other agent as well.  No seller wants a buyer who is looking for “an out”.

I have had agents bring offers, in mulitple offer situations, tell me “I hope this one works.  I’ve submitted 7 offers for these buyers and they cancelled on home inspection EVERY time!”.  When the Buyer Agent “vents” to the Agent for the Seller…what are they thinking?…but that’s another post.  For now, know that your offer CAN be revealed, used, shopped and utilized to the seller’s best advantage.