How do you know if there are multiple offers on a home? Here are some clues.
Spring is finally heating up, and that means buyers will begin flooding open houses and looking for their dream home. For many, it takes a lot of time and energy to find the right property — and once they’ve found that dream home and prepared a bid, it’s quite possible there will be multiple offers for it. This competition will influence the final price, of course, and there’s no surefire strategy to determine the intensity of it. But here are four ways you may discern whether a home has multiple offers — or any at all.
1. Ask the Listing Broker
That’s right! If you want to know about multiple offers, go straight to the horse’s mouth and see if you can get some indication.
Of course, the broker that represents the seller is under no obligation to disclose whether there are multiple bids. As a matter of fact, a broker may be inclined to bluff and say there is “a lot of interest in the property” and that they expect multiple bids, or have already received one or two.
Even worse, a broker may tell the buyer that they plan on doing a “best and final,” where they ask “everyone” to submit their best and highest offer by a given date and time. This is intended to give the impression that there is a lot of demand for the property. However, a listing broker may simply be bluffing in an attempt to coax a strong offer out of the one individual who is actually interested.
But don’t worry! All brokers do not conduct their business this way. Rather, some listing brokers may opt for the honest truth and say something along the lines of: “We have nothing yet, and the owner is willing to listen, so please submit an offer if you are interested.”
Sniffing around for signs of multiple offers is a cat-and-mouse game. Obviously, the listing broker wants the highest selling price for the property, and giving a buyer information that they are the only interested party may lower it. Also, when a property already has a strong offer on the table, the broker may flat-out tell a buyer that it’s only being shown for backup purposes, in case the initial deal falls through.
2. Look at Days on Market
If a property has been on the market for several months and still has scheduled open houses and regular showings, it’s likely there are no other bids. Even if there were bids outstanding, the fact that the property is still being marketed implies that any bids are weak or that the prospective buyers are not well qualified. For a strong buyer, this may mean an opportunity to strike and get your dream home without the stress of multiple bids. Or, occasionally, there are unusual circumstances that keep a home on the market. Last year, one of StreetEasy’s most popular listings lingered on the market for nearly a year because of an ownership imbalance in the building.
3. Go to Open Houses
Savvy and determined buyers usually show up at one of the first two open houses to get a sense of the foot traffic a property is attracting. If the open houses are wildly popular, buyers should be prepared for multiple bids.
A buyer is also able to see how popular an open house might be simply by looking at the number of saves a property receives on StreetEasy. Getting more than 100 saves within the first 2 weeks is generally a sign of a very popular listing.
But seeing lots of people at open houses and a high save count shouldn’t deter a buyer from submitting a bid, since many people might just be window-shopping. Just don’t be surprised if a broker counters a bid by saying that the owner has decided to wait several days to hear back from all prospective buyers.
What happens if a buyer doesn’t see many people at the open house? It’s a sign the price might be too high, or there isn’t much desire for that home type, or perhaps the location is not popular.
4. Watch the Price Point
If a property is priced incredibly well, a buyer should expect multiple bids. Sometimes a broker’s listing strategy is to slightly underprice in an effort to attract the largest quantity of bids, which can result in a bidding war. If a property is priced too high, one can assume it won’t attract as much attention. Also, if a property’s price is reduced during the active listing’s life cycle, then it’s a surefire bet that there are no bids on the table. However, a price drop may be exactly what the listing needs to solicit more bids, so it’s sort of a catch-22. Anytime you’re trying to sniff out possible other bids on a property, it’s important to use your intuition and pay attention to the signs above.
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