Kari McCoy commentary: How sellers maneuver multiple offers

Question: Dear Kari, I listed my home for sale with my agent and right away I received three offers. I wanted to counter each offer to obtain the highest one, but my agent advised me to only counter the highest offer and not address the other two. Do I have the right to counter all of them? Answer: Thank you for your great question. I will try my best to answer. First, let's look at how sellers are allowed to work with counter offers. Counter offers are created by a home seller along with their agent once a buyer or buyers have submitted an offer to buy a home. The seller must sign the buyer's original offer in order to request additional changes in the counter offer. Some items that may be requested by the sellers are: more money for the home, longer or shorter closing timeframe, increase the earnest money amount, shorten contingencies, and/or refuse to pay for some title fees, etc. Keep in mind, buyers also have the right to counter the seller's counter offer. There is no limit to how many counters offers the buyers and sellers may work with. I have seen as many as seven counter offers in experience. The key to counter offers is to keep the spirit of the contract and negotiations in a positive manner. This will allow both parties to feel heard and well addressed. Working with multiple offers is a seller's dream come true and a buyer's nightmare. There are several options for a seller when working with multiple offers. In some states, sellers are not allowed to work with or counter more than one offer at a time, but not in California. Here, sellers are allowed to counter as many offers as they wish. In fact, a seller does not even have to counter an offer at all, or even respond at all (however, if the offer were a full-price offer, the buyer's agent may demand a commission if that offer were rejected, unless there were other offers on the table). Some options for the seller are: Sellers can accept one offer and reject the rest, counter all offers with the same terms, counter all offers with different terms, reject all offers, counter one offer and reject the rest, or they can counter one offer while putting the other offers aside. The seller's agent may also request all the buyers' agents to go back to their clients, offering them the opportunity to alter their initial offers, making it more attractive to the seller and perhaps winning the sale. According to the real estate code of ethics, the seller's agent shall submit all offers and counter offers objectively and as quickly as possible no matter how ludicrous the offer sounds to the agent. The seller's agent is not allowed to reveal the terms of any buyers' offers to the other buyers' agents. The seller stands to benefit because none of the buyers have any idea what the other buyers' counter terms are. Therefore, if a buyer wants the home, they will be forced to step it up and possibly pay more than they wanted to. Some people refer to this situation as the "catbird seat." While the listing agent can offer suggestions and advice, decisions about how offers will be presented – and dealt with – are made by the seller, not by the listing agent. According to the code, a listing agent must submit all offers regardless of where the sellers are in their negotiations, as long as it is before accepting an offer. Any way you look at it, a situation with multiple offers is ideal for the sellers, as they have complete control and a variety of options over how to handle those offers. Be wise to look well beyond the offer price to make sure all the other terms set forth in the purchase agreement are agreeable with your particular situation. You can rely on your real estate agent to address them along with keeping your best interest in mind. Kari McCoy has been a Realtor for more than 30 years and owns the Kari McCoy Group, Residential Real estate, at Lyon Real Estate. She can be reached at 916-933-5274 or by email sold@karimccoygroup.com. License No. 00841588.