Multi offers on the rise
In a property market short of stock, buyers are hearing that their offer “might be a multi offer.” This creates a lot of confusion and uncertainty. In this tight real estate market, it is important to understand what this means for you.
Making an offer on a property
First in – first served. Right? Wrong! There are no real rules around how offers are to be presented to sellers by real estate agents. If one buyer makes a written offer, but the agent knows a second party is also wanting to make an offer, the agent is in a difficult position. Their client (the seller) will want to view all of the offers and most sellers are prepared to wait until all offers are ready to be presented. This can often mean a situation that started out as a single offer, can quickly evolve to a multi offer situation.
As a prospective buyer, what do you do if you have invested time and money getting an offer prepared, thinking you would be the only one?
Real estate agents responsibility
There’s no simple answer, unfortunately. It’s the real estate agent’s responsibility to treat each purchaser fairly. The only real way to do this is for them to put the first offer on hold until all other prospective buyers also have their offers ready.
This results in almost every listing being a de facto multi offer. In order to manage and protect your own expectations, you should approach a purchase with this in mind.
Real estate agents are not the only ones who can prepare and present offers to the seller. A buyer can instruct their lawyer to prepare an offer and present to the seller’s lawyer which has the effect of getting around the multi offer process.
If you are experiencing multi offer situations, talk with us about how best to protect yourself and give yourself the best chance of succeeding with your purchase.
This article is taken from issue 24 of PropertySpeaking, the quarterly e-newsletter of the NZ Law group of law firms of which HomeLegal is a member. To talk further about dealing with multi offers, or for any of your conveyancing needs, please do not hesitate to call HomeLegal or contact us online.