A Word About "Bidding Wars"
by Lauren Kermode
We've all heard the expression "bidding war". As a matter of fact that expression was used in the previous article. But let's make some things perfectly clear:
1. In Maryland, the Seller/s has a right to decide if they will allow their agent to __disclose to perspective Buyers whether or not there are multiple offers. That __means that there could be one or more offers coming in on the property __you'd like to buy but in some cases, the agent is not allowed to disclose that __information.
Disclosing multiple offers can have two very different effects on perspective Buyers. Some Buyers feel they should make their very highest and best offer the first time if they know their offer is one of several. Other Buyers have no desire to compete for a contract and choose to walk away and continue to search for a house rather than be part of that competition. That's why some Sellers choose to disclose and some don't.
1. Only one offer can be negotiated at a time. If there is a multiple offer __situation, an agent who has his/her Seller's best interest at heart will present __multiple offers (as long as they come in before the next time agent and __Seller can conveniently meet) at the same time so that they can be __compared. After discussion with his/her agent, the Seller then has the __following choices: One offer can be either "accepted" or "countered". The __others must all be rejected. Only one offer can be negotiated at any one __time. The others all must be rejected. Keep in mind, though, that an offer __"on the table" is a "living thing". That means until ALL of the necessary __signatures and initials are gotten for each page of the document, it is still __just an "offer". An offer doesn't become a contract until it's signed in its __entirety. At any time during that process, another Buyer can come along __with a better "offer". At that point, the better offer could be accepted and the __first offer being negotiated would need to be rejected.
2. There's more to an offer than the price. We tell our eager Buyers who know __or suspect they're part of a multiple offer situation to make their "highest and __best" offer the first time. This means the price should be the highest they __feel comfortable paying for the property, the settlement date should be the __soonest (or most flexible) they can make it and the offer should include the __fewest contingencies such as home inspections. Though we never council __our Buyers to waive their right to a home inspection, in a brisk Seller's __market this tactic could make the difference between getting a house and __not getting it.
3. Use an "Escalation Clause" if called for. An Escalation Clause is a __document that provides for your offer to be escalated to $______ over __anyone else's offer up to and including $_______. You fill in the blanks. In __order for your offer to be the one accepted and an escalation clause to be __used as part of the contract, the Seller must show that the increase in the __offering price will directly raise the amount of his "Seller's net". Your offer __cannot be increased over and above another offer that requests "Seller's __help", for instance.
Confused? That's why you should have a professional on your side. Make sure it's someone you like and trust. We'll be happy to help you create an offer that works for you AND gets accepted by the Seller.
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