Multiple offers on the rise in some areas of PA

I’ve been in the real estate business for more than 30 years and this year I’ve seen more multiple offers than ever before. Throughout the greater Pittsburgh market, our offices have seen anywhere from 10 percent of their listings receive multiple offers to a high of 65 percent for several of our branches. A significant number of these multiple offers have created bidding war scenarios. I believe part of this competitive climate between buyers can be attributed to our recovering economy but more significantly I think it’s caused by a shortage of quality houses on the market.

As a broker, I advise our agents to be mindful of the important responsibilities of seller agents, buyer agents and dual agents in every transaction.

First and foremost, we need to consult NAR’s Code of Ethics and Standard of Practice, which outlines certain appropriate behaviors in a multiple offer situation. Specifically, Standard of Practice 1-15 states that, with the seller’s approval, Realtors® must advise a buyer or buyer agents of existing offers on the property if asked. Also, if asked, the listing broker must disclose whether other offers were procured by the listing agent, another agent in that firm, or a cooperating broker.

PAR offers several Standard Forms that can help buyers and sellers in a multiple offer situation. The Multiple Offer Summary Worksheet (Form MOS) allows sellers and listing brokers compare the main terms of competing offers on a single sheet. The Seller’s Reply to Purchase Offer (Form SRP) helps to assure competing buyers and agents that their offer was presented. The Price Escalation Addendum (Form PEA) can help buyers protect their interests where a ‘bidding war’ breaks out, and using the Appraisal Contingency Addendum (ACA) may protect buyers against offers that get too out of hand.

Here are nine things for a buyer agent to consider in a multiple offer situation:

• Recommend that your buyers come in with their highest and best offer
• Consider suggesting the Price Escalation Addendum
• Have a strong pre-approval letter
• Encourage the buyers to create the most favorable terms they can
• Obtain a strong hand money check
• Obtain a hand-written personal letter from the buyer to the seller
• Try to present the offer directly to the seller, even if by conference call
• Ask the listing broker about the seller’s specific terms, for example, a closing date
• Ask the listing agent for information about the other offers.