The Curious Psychology of Multiple Offers

Lay people think multiple offers on a property are great for sellers because they drive the price up. And they’re right, sometimes. But not always.

Some buyers respond aggressively to a multiple offer situation — they strategize their offer to win. They will go over asking price if they think they have to. They’re the ones who up the ante, to the seller’s benefit. However, that’s the way some buyers react. It’s not the way all buyers react.

Other buyers will walk away from a multiple offer situation. Their attitude can be summed up as, “Not gonna play — the other folks can have it.” Best case scenario, these buyers leave their offer on the table. Worst case, they withdraw their offer entirely as soon as they hear their offer is competing.

I wish I knew what the percentages are, of aggressive vs. outta-here buyers. I do know that there aren’t enough of the aggressive ones to make me welcome multiple offers when I’m the listing agent. Yes, sometimes my seller will end up with a contract and a higher price. But way too often, multiple offers are trouble.

Having more than one offer ratchets up emotions, and that’s never a good thing. I’ve seen an agent get angry when she felt that another buyer was favored over her own. I’ve seen a buyer get insulted and withdraw his offer when told that a second offer was coming in. I’ve negotiated an offer to verbal agreement, only to be dumped for a better offer before we had time to get signatures — and I’ve done the same thing to another agent. I’ve seen a seller with two, and a seller with THREE, offers on the table end up without a sale — and wait months longer before the next offer came in, for less.

Multiple offers mean that wild cards are in play and the outcome is far from certain. Even for the seller, they’re not an unmixed blessing.