First of all, there really are not any defined rules. The seller is the true deciding factor on how the multiple offers are handled. The seller can accept an offer, counter some offers and not others or outright reject one or all offers.
Since multiple offers can be a complex and often an emotional experience, we put together this
Q & A page to give buyers and sellers a better idea of what they might expect when this type of situation arises.
Q & A - Multiple Offers
1. Doesn't the SELLER have to work with the first offer they receive first?
No. They can work with whichever offer they choose.
2. Does the seller and/or the listing agent have to give notice to all parties that there are more than one offer on the table?
An agent can only disclose the existence of multiple offers only with the permission of the seller. However, it is usually to the sellers best interest to give notice to all parties so that everyone is given an opportunity to give their highest and best offer.
3. When the seller delivers a counter a offer to a buyer and another offer comes in before the buyer responds, isn’t the seller obligated to work with the offer that is in progress before moving to another offer?
No. The seller has the right to cancel their counter offer at any time before they receive delivery of an acceptance from that buyer. The seller can either decide to take the better offer, counter the offer of choice or notify both parties to give their highest and best offer. However, it is often common practice for a seller to deal with one counter offer at a time. It is truly up to the seller on how they want to handle multiple offers.
4. If I make an offer through a buyers agent who does not have the property listed and another offer comes in through the listing company (or other company), can the listing agent/company share my offer with the other bidder?
Yes and No. A listing agent who is not representing the buyer(s) cannot share an offer with other buyer(s) UNLESS the seller gives authorization to do so.
(Note: In a dual agency situation, the agent cannot disclose offers to other bidders without permission of the represented buyer, even with the sellers authorization).
5. If there are multiple offers and the seller chooses to counter my offer, can I counter the offer again?
Yes, but the moment you counter the sellers counter, the sellers offer is VOID. You are basically making a NEW OFFER. The seller can then decide whether they want to accept, reject, counter your offer or move onto negotiating with one of the other offers. In some cases the seller may ask all parties to present their highest and best offer, at that time.
6. If my offer is not accepted, can my offer it be used as a backup offer?
That will be up to the seller. In many cases, the seller might offer for you to hold the back-up offer, but at the same terms as the accepted offer. If there were more than 2 offers, they may decide which buyer should hold the first back up offer or decide not to offer backups at all. (Most foreclosure listings won’t accept or offer back-up offers).
Q & A - Dual Agency with Multiple Offers
7. What is the advantage of having dual agency representation (buyer and seller are represented by the same agent or firm)?
It protects the confidentiality of both parties. The agent cannot disclose confidential information about either party without consent.
8. What is the disadvantage of dual agency?
The agent cannot council either party on what to offer, what to accept or what to counter. However, if asked, your agent can provide information about similar properties that sold in the area. Then, based on that information, you’ll have to then decide what price you think is fair.
9. As a buyer, can a dual agent provide council on what I should offer?
No. However, as answered above: If asked, your agent can provide information about similar properties that sold in the area. Then, based on that information, you’ll have to then decide what price you think is fair. However, agents are still obligated to disclose any known defects of the property to the buyers.
10. When working with a dual agent and multiple offers come in using the same agent, how do I know that my offer is not being shared with the opposing bidder?
With dual agency, the agent is obligated to all represented buyers NOT to disclose the offers of the opposing parties without authorization. However, if a buyer is not represented by the listing agent/office and the seller gives authorization to share offers with one or more parties, this can occur and it is legal.
Disclaimer: I/we are not attorneys and these questions and answers have been complied through online research.
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