Buyer Misconceptions
By Jim Palmer Jr.

In a recent case, a buyer fired their broker because they misunderstood the buying process and had misconceptions about how sellers respond to offers.  When the seller made the decision to accept a different offer and never responded to that buyers offer, they thought their broker hadn’t done a good job.  They were under the impression that the seller had the obligation to respond to their offer first, since their offer was received first in line, even though the broker had coached them that their offer may not be competitive enough (based on the fact that they knew other offers were coming).

The truth is that a seller has no obligation to look at offers in the order they are presented.  The seller has no obligation to even respond to an offer that is less than what they expect to sell for, or they can reject an offer for any reason at all.  Buyer’s brokers usually ask the question to the listing broker before spending the time to write an offer for their client, about whether or not there are other offers coming or already on the table so they can make a competitive offer. 

When a listing broker responds to that questioning in the affirmative, what they are really saying is, “bring your highest and best offer!”  The buyer in the above case ignored that response thinking that the seller had to deal with one offer at a time and in the order they came in.  They lost out and blamed it on their broker.  That broker was probably better off in the long run because they now had more time for more attentive buyers. 

Making an offer on a property is not like an auction where there is a bidding process as some buyers expect!  Like I already said, sellers have no obligation to respond with different terms or to even respond at all. 

Nonetheless, some sellers do respond to all offers in the attempt to create a bidding war so they have the chance to get more for the property.  But that strategy can be risky for sellers unless the all the market power is tipped towards the sellers side. 

Buyers should listen to competent brokers when they explain there are other offers!  Unless you don’t care if you ever buy a home, you need to be prepared to be competitive.  That means you are prequalified and ready to stretch a little to meet your ultimate goal of purchasing a home.