Buyer making two offers to buy one property. Huh?

likesivySeptember 10, 2010

We have a condo for sale. Today our realtor told us that we'll be getting an offer this Monday. It's coming from the client of another local realtor. The buyer has looked at our condo twice and will look again on Sunday. He's also looking at another unit, priced almost the same as ours.

The buyer is making offers to both condos at the same time. One unit will be listed in first place (presumably ours), the other as a back up. I have never heard of this being done, although my realtor acted like it is not that unusual.

The buyer is ready to move since his house has already sold. I don't see the value of making this kind of offer. Is it just to speed things along, or is it to keep sellers from negotiating? I don't know if we have the opportunity to counter, or if the offer moves to second place if we don't agree to all terms.

Is anyone familiar with this scenario? Is there anything we should know that maybe even our realtor doesn't know about?

Thank you for reporting this comment. Undo

The value, to the bidder/buyer is to secure a place in the bldg he's interested in. I don't see that as being a problem, or unique. I would be a bit worried if I were that person, however, if both offers get accepted at the same time, leaving him on the hook for both (though he may be buying to then rent them out, which is perfectly legal for him to do).

    Bookmark   September 10, 2010 at 4:59PM
Thank you for reporting this comment. Undo

I've never done it nor had it done to me but I've heard of it happening. It's a negotiating ploy. The buyer is basically telling you that if you don't negotiate with him he has another property he would be just as happy with. No skin off his back which of the two he takes.

Think of it as car shopping. You find a car you like, if dealer A doesn't give it to you for the price you're willing to pay, then dealer B will.

    Bookmark   September 10, 2010 at 5:18PM
Thank you for reporting this comment. Undo

I bet they are prepping you for a very low offer. Why else would they pass this info on to your agent? It sounds like hard ball.

    Bookmark   September 11, 2010 at 8:02AM
Thank you for reporting this comment. Undo

"The buyer is making offers to both condos at the same time."

Not common, but it happens. Especially when there is a ton of inventory out there. The buyer has found two properties that meet his criteria. Sellers do it all the time in a sellers market when they get multiple offers. What is good for the goose, is good for the gander.

    Bookmark   September 11, 2010 at 8:32AM
Thank you for reporting this comment. Undo

"What is good for the goose, is good for the gander."

Except for that annoying case when both offers are accepted before the buyer can cancel the second offer.

Unless the buyer is looking for two places, they will have to act very quickly to cancel the second offer as soon as the first is accepted.

You could probably create language in each offer making them only good if the other has not been accepted.

First acceptance would 'win.'

    Bookmark   September 11, 2010 at 9:54AM
Thank you for reporting this comment. Undo

Brickeye... exactly.

    Bookmark   September 11, 2010 at 3:05PM
Thank you for reporting this comment. Undo

This happens periodically where we live b/c many properties go on the market for 10 days or so and then have a deadline for offers. If two homes you like have the same deadline, you might want to put an offer in on both to make sure you're in the game---otherwise, if you don't get one, you don't have a shot at the other at all. I also know of it happening with short sales, since you don't know if/when an offer might get accepted---one of our friends who recently bought had three offers in at once. So there are incentives for the buyer beyond just negotiating price---if this guy knows he wants this building and there are two units he's equally happy with, he wants to be sure he has the best chance possible of getting one or the other. If he only put an offer on one, he might get outbid, and meanwhile the other could go into contract independently. He's hedging his bets so both sellers know he's interested.

I've only ever heard of it in cases where the offers had contingencies so people could back out fairly readily, but virtually every contract here has at least one if not multiple contingencies. Our state also provides for buyers to get their earnest money back if they cancel the contract---I'm sure this is far less common in states that don't have this provision, since then you'd be out your deposit.

    Bookmark   September 11, 2010 at 3:36PM
Thank you for reporting this comment. Undo

I was a seller a few years ago, during the wild and wooly days of seller's market. I got several offers that seemed to be less that serious & asked my realtor about it. He said that some people were just trying to get in position in case they "might" decide to try to buy the house. I asked if they weren't playing fast and loose with deposit. He said that in California the buyer is very well protected and that it is almost impossible for the seller to get the earnest money.

    Bookmark   September 12, 2010 at 3:55PM
Thank you for reporting this comment. Undo

Okay, here's how it went down. Our so-called Buyer made his offer and it was low ball -- $110,000 for a property listed at $144,000, that's been on the market for 6 months.

Other units in the same complex are listed for slightly more and are slightly less appealing, so we feel the price is fair. Our realtor assures us it would have no difficulty appraising at or above our listing price. The market here is slow, but not dried up. Feedback on our unit has been positive. At least three people would buy it tomorrow if their own houses would sell.

The offer came with a deposit of $5,000, and with the verbal message that Mr. Buyer is prepared to put the same offer to his second choice condo in the complex if we refuse the offer. The other unit is priced at $145,900, has been on the market for 1.5 years but at higher prices. It's not in as good condition as ours.

I suppose the negotiating strategy here is to put pressure on the sellers to come down as low as they dare.

Our realtor explained that the buyer isn't bound to any offer we make until both parties sign it. In other words, he can take our counter-offer and then make an offer to the other condo, telling them that we have countered, but supposedly not giving numbers.

Why do I feel like I am on the auction block?

I must say, the strategy does have the effect of us wanting to go as low as we can with a counter. We'll probably come back with our lowest bearable figure -- $139,000. We bought and fixed this condo expressly to make money, and we still earn something at that price.

Of course we have no idea what our competition will offer.

    Bookmark   September 13, 2010 at 7:51PM
Thank you for reporting this comment. Undo

The buyer raised his offer to ...$118,000. Still too silly, so we held firm, knowing he might walk. Instead, he agreed to our adjusted price.

Turns out he was being advised by his son, and when it looked like the deal would fall apart, he told his son to step aside and let him go ahead with the purchase.

Happy ending.

    Bookmark   September 15, 2010 at 2:10AM
Thank you for reporting this comment. Undo

Good ending, happy for you!

    Bookmark   September 15, 2010 at 11:30AM
Thank you for reporting this comment. Undo

Good for you for sticking to the price you needed. Glad your buyer knew when to stop listening to his son!

    Bookmark   September 26, 2010 at 9:15AM
Sign Up to comment
More Discussions
Verbal offers suddenly surface
Too much drama. We put offer on house number one, house...
Randy Ritchie
New front door--ok to put lockbox on back door?
We have a new (quite expensive) front door and screen...
Retiree - rent or buy home
We are newly retired and have a plan to sell our current...
Emotional rollercoaster of home selling
Lately, this process of having my condo up for sale...
Home closing delayed or is it a wash-out?
Hello everyone, I am a new poster, but have enjoyed...
People viewed this after searching for:
© 2015 Houzz Inc. Houzz® The new way to design your home™