How to WIN in Multiple Offers

When more than one buyer submits an offer on the same listing at the same time, that is a multiple offer situation. Today's market is full of them - most buyers I work with encounter at least one, and many of my listings end up going that route as well. So how do you WIN in a multiple offer situation?

Well, if you're the seller and you've received multiple offers, congratulations: You've pretty much already won. It's still important to take care in negotiating the offers appropriately to get the best outcome, but the odds are in your favor.

As a buyer, multiple offer situations can be incredibly frustrating. Sometimes you know how many other offers are on the property. Sometimes you know whether they are cash or financed. In rare instances you might even know the price of one or more of the other offers. Usually, you know none of the above. All you know is that there are "multiple offers" and you need to submit your "highest and best" offer by a certain date and time. If you haven't been in that situation before, just imagine the house you want to live in is now hanging in the balance of what is essentially a blind auction in which the spectrum of truths runs from "you don't have a chance" to "the other offer(s) are junk and you're bidding the price up against yourself." Thoughts and emotions swirl, and making a decision can be difficult, especially when more than one person is involved.

Here's how to win. It has nothing directly to do with percentages, asking prices, comparable sales, or other objective concepts - at some point, all of that becomes too much noise, too many considerations, too many variables and assumptions. This may seem simple, and yet from being involved in countless transactions of this nature I can promise you it's the only way to come out of the situation feeling good about it: You have to choose a Magic Number. That's right, a Magic Number. That's the price (and terms, but mostly the price) at which...

- If you do get the property, you're happy and you don't feel you overpaid, AND
- If you don't get the property, you're ok letting the other offeror(s) have it.

If you do get it, you'll never know what the other offers were, and you never need to. If you don't get it, you'll eventually find out (when it closes) what the winning offer was, and if you were honest with yourself when you chose your Magic Number, you'll look at the closed price and feel satisfied because you know you wouldn't have paid that much.

The best way to make sure you've arrived at the real Magic Number? Fast forward a year, or five or 10 years, and look back on the decision to imagine how you'll feel about it in the future. Things that seem to matter a lot right now (for instance, $1,000) seem to pale in comparison to more important things in the long term, and those more important things are what buying a home is all about.