It’s clear to many who are dealing in the frenetic world of real estate today, that the possibility of getting multiple offers on a new listing is fairly high. While there are pockets of the country where this rarely happens, there are other places where it occurs 8 out of 10 times a new listing pops up.

In the "old" days of real estate, the multiple offer was a sacred and coveted thing. Wow, more than one person wants the house. Cha ching go the strings of my heart. Now, more times than not, agents lament the multiple offer as one colossal headache.

The house comes on the market, there is a big push on showings the first day or so and boom, the listing agent is in negotiation with another agent with an offer in hand. In the mean time, the phone is ringing off the hook with back-ups or perhaps the seller is going highest and best, that being another can of worms…

Here are some examples of problems that may occur with multiple offers:

1. Seller’s expectations of price are thrown farther out of whack than normal
2. The final accepted offer does not appraise out and there is no sale unless seller, buyer or both make concessions
3. Highest and best or sealed bids create suspicion and angry buyers and agents in all directions. Keep in mind, when a buyer submits a highest and best bid by simply saying they will go X dollars or percent over the next highest bid, that may not be considered a proper bid. ciThere is no actual dollar amount specified. A better way to do it would be to state that the buyer’s maximum bid is up to X dollars, but they will not pay more than Y dollars above the next closest bid, up to their stated maximum.
4. The pending sale does not culminate and the seller must re-list/re-negotiate and can’t see their way to a lesser sale price than the first over-list offer that went bye-bye

In order to avoid some of these potential pitfalls, pre-planning is crucial. As we know, the best time to handle an objection is before it comes up. The key skill is to properly prepare the seller by leading them to the conclusions that you want them to draw. The best selling tip I can give you here is for you to never forget that people will not argue with conclusions that they come to on their own. If you are spending more of your time convincing and too little asking the right questions to draw them out, you are talking too much and not listening enough.

What follows are a few important questions to have at your fingertips when you are on a listing and you are fairly sure the home in question will be hot, hot, hot when it hits:

"Just out of curiosity, Ms. Seller, what are your thoughts about the real estate market at the present?" If they say it’s really great, ask them to be more specific. "What does great mean for/to you?" If they say that things are selling very quickly, here is the follow up…

"That’s true. For many sellers and agents, when a home is correctly priced, it may sell in the first few days. When a home is really well received, what do you think might be the result relative to offers made?"

"That’s correct, a seller may get several offers back-to-back. I’ll bet that sounds like a good thing to you all the way around. But let’s play real estate for a minute, if you don’t mind. Please tell me this. Do you think there might be a downside to that situation?" If they come up with some ideas for downsides, probe them further. If they say there are no down sides, continue as follows…

"I can appreciate that you might think that multiple offers are ideal, but suppose this happens. You have two or three eager people who want the property, and they, being humans with respectably large egos, get a bit competitive with each other. Do you think the home might go above list price?" Wait for their answer. "Absolutely correct. It might. Now, we accept the highest offer and the bank comes out and appraises the property. The bank has no ego in the situation and will price the house unemotionally. Can you see where I am going with this?" Wait for them to come up with the problem. "That’s the downside. Many times in multiple offers the bank appraisal is too low to substantiate the price offered and then where are we? If you were the buyer, do you think you would want to overpay for a property and risk losing money if you had to sell it down the road? After all, we never know what the market will do at any given time. Wouldn’t you agree?"

"If this were to happen to you, and it might, what do you think you would be willing to do?" Depending upon their answer, probe, probe, probe.

"While this may not apply to you, sometimes when a seller takes a higher offer initially and it does not work out, they anticipate that the next offer to come along will be equal to the first offer or perhaps higher. That’s a slippery slope of an assumption. Can you imagine why that thinking often proves to be problematic?" You want them to come to the conclusions that you have no crystal ball, the market changes, first offers are often the best, the longer it is exposed, the more leeway buyers feel they have to negotiate, etc. You know the routine. Help them to realize it, too.

If you are facing multiple offers, please remember that the monkey goes on their backs and not yours. Your job is always to help sellers to know and understand the things that will lead them to make the best business decisions possible for the long haul. You can’t control them but you can educate them.

Published: May 29, 2001

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Marylyn B. Schwartz, CSP, is a noted expert in real estate and corporate sales training, team development, customer care and diversity issues. She is president of TEAMWEAVERS and a trainer for Leader's Choice, the number one real estate sales training program in North America. Marylyn is also an author and Business/Life Coach. Contact her at , or visit her website at teamweavers.com.