In a hot market, multiple offers are common but it is not the wild west out here – there are rules that govern how to handle a situation where a seller receives more than one offer. The Real Estate Council of Alberta (RECA) is the regulator of the Real Estate Act of Alberta and they have an excellent bulletin on multiple offers.
We often hear the term “good faith” in the real estate world and while it does carry significant weight, in a multiple offer situation there is no obligation for the parties to act “fairly”. In reality, it is the seller that is calling the shots according to law. The agents involved have strict obligations to their clients to follow – loyalty, acting honestly and obeying a client’s lawful instructions, to name a few – and properly advising the seller of their options in this case is particularly vital.
RECA provides specific directions to a seller’s agent on how to advise their client in a multiple offer situation, including:
- Explain to the seller the choices and strategies available for offer presentation
- Recommend the seller look at each offer before making a decision
- Advise the seller of the buyer’s options and indicate that buyers may, and often do, remove their offer in a multiple offer situation
- It is the seller client’s choice whether to disclose the multiple offer situation to the buyers (yes, a buyer may be competing and not even know it!)
When it comes to the buyer, here is what RECA says to the buyer’s agent:
- Tell the buyer of the multiple offer situation
- Advise the buyer of the seller’s options
- Advise the buyer of their options, including:
- Increasing the offer prior to presentation
- Leaving the offer as is
- Withdrawing the offer
- Reconsidering the fixtures, chattels, terms and conditions of the offer
There are other things a buyer can do to improve their position in negotiations and I’ve been in the game long enough to know all the tricks! Correctly assessing the situation, having open communication with the seller’s agent and properly leveraging any position can go a long way to making sure you secure the home of your dreams.
Whether you are a buyer or seller in a smoking hot market, I’ve got your back. Let my 30+ years as a full-time real estate professional go to work for you, call me today. Visit me on Facebook and Google!