Explaining how multiple offers work when selling and buying property
THE Real Estate Institute of Queensland (REIQ) often receives queries from consumers about multiple offers on a property.
A multiple offer occurs when more than one prospective buyer makes an offer on a property by submitting a Contract of Sale.
Multiple offers often happen in a ' seller’s market', when competition for residential property is greatest and there are more buyers than there are properties for sale.
However, it can occur in any market and especially for properties within an affordable price range.
Occasionally prospective buyers allege that agents tell them there is another offer on the property in order to secure a higher price for the seller, when in fact there is no competing offer, REIQ managing director Dan Molloy said.
There are heavy penalties for agents who mislead or deceive buyers by telling them there are competing offers when there are not.
“When a seller is to be presented with multiple offers, a prudent agent will inform prospective buyers of that fact in writing and obtain a written acknowledgement,” Mr Molloy said.
“This gives potential buyers an opportunity to submit an offer if they have not already done so, or to revise an existing offer that has not yet been accepted by the seller.”
Mr Molloy said real estate agents have an obligation under the Property Agents and Motor Dealers Act 2000 to submit all offers that comply with the seller’s instructions to the agent.
“Exceptions occur when, for example, the seller instructs their agent not to submit offers under a certain dollar figure,” he said.
“Agents also have a statutory obligation to attempt to get the highest possible price for the seller. The law further requires that agents be fair to buyers.”
Buyers should also be aware that sellers will examine all the terms and conditions of each offer before deciding to accept or reject any particular offer.
The conditions can make certain offers more attractive for reasons other than the proposed price alone.
“Some sellers may be prepared to accept a lower price if the offer is unconditional rather than take the risk that a higher offer may not proceed to settlement, because of the special conditions required by a buyer,” Mr Molloy said.