Buying property in a ‘Multiple offer’ situation in Brisbane
As the Brisbane real estate market heats up, it is becoming increasingly common for sales agents to receive multiple offers on their listings. Negotiating in a competitive environment can seem daunting: Is there really another buyer? Are the other offers higher or lower than mine? Should I hold my ground or increase my offer? What is the best way to proceed? Brisbane Buyer’s agent Matt Reeves explains:
What is a “multiple offer” in real estate?
When there is high demand for a property the situation may arise where there is more than one buyer competing for the opportunity to purchase. This is especially the case in a rising market and for unique or well-priced property. This results in two or more prospective buyers making offers on the same property. This is known as a ‘multiple offer’ situation.
The Sales Agent’s Obligations
In a multiple offer situation the sales agent has the following obligations:
- to advise each prospective buyer that they have received more than one offer on the property
- to give each prospective buyer the opportunity to change their offer if they choose to.
- to advise buyers that once their offer has been submitted, they may not have the opportunity to negotiate further.
The Seller’s position
When the vendor is presented with multiple offers on their property they may choose to proceed in a number of different ways. They may:
- accept any one offer
- negotiate with any one offer
- reject all offers
- accept an offer without giving the others the chance to increase their offer
- accept an offer that is not necessarily the highest, but whose terms and conditions are the most favourable.
How should the Buyer proceed in a multiple offer situation?
Buyers should exercise caution when they find themselves in a multiple offer situation. This is particularly important for investment purchases where buying at the right price is critical. Buyers need to be confident that they understand market conditions, know exactly how much the property is worth, and make their offers accordingly. Buyers should accept that it is better for the property to be sold to another party, than risk paying too much.
There are a number of ways for buyers to make their offers more attractive to the vendor – after all it is not all about purchase price! Consider the following:
- Increase the size of your deposit – a larger deposit gives the seller greater confidence that you have your finances in order.
- Consider waiving your right to a ‘cooling off’ period.
- Make a cash offer (or reduce the timeframe or your finance clause).
- Perform your building and pest inspection in the shortest possible timeframe.
- Understand the needs of the seller. Would they prefer a longer or shorter settlement period? Would they like to rent the property back after settlement? Many sellers will accept a lower sale price if it means less inconvenience for them.
Buying property in a multiple offer situation can be confronting for many Brisbane buyers. Understanding the process should give buyers greater confidence. Knowing market conditions, and ascertainly what a property is truly worth is fundamental to a successful outcome. For professional advice, consider employing a Brisbane Buyer’s Agent to assist with property negotiations. Good luck with your property search!