This practice is often done with different types of major purchases: automobiles, business deals, and yes (we know) homes!! Is this a good idea, especially when it comes to a For Sale by Owner home? Let us take a look at this concept.
There are occasions when an FSBO will receive multiple offers on their home. In that case they have a few ways available they can deal with this. One way is to let each potential buyer know that there ARE other offers being made to them. They can even “play a game” of telling the other prospects when a counter offer is made. An important thing this will do is jack up the selling price of your home. The logic being, whoever wants it badly enough will pay the highest price to you. This is almost like being at an auction. In this type of a scenario, telling prospective buyers about other offers is a good thing.
However, before utilizing this type of strategy you must understand any negative effects this could have on your sale. If one or more of your prospective buyers feels they have already proposed a fair price for your home; continuing to play this game could only aggravate them. You may well wind up with everyone getting disgusted with the process and NOBODY buying your house. Then YOU will be the loser, as the possible buyers will likely all go elsewhere instead.
Something else about an FSBO entertaining multiple offers for their home and telling the other buyers about them is this. Both the seller and the buyer run the risk of missing out on a great opportunity. This is an especially good point to make to the other potential buyers in a multiple-offer situation. Be sure to tell them all the great features of your home, yard and neighborhood. Do not leave out any important details. Let each prospect know what they will be missing if they drop out of the process. Remember – it is highly likely they already view your home as a “deal they cannot refuse.” Then they could wind up just as disappointed as you are if they miss out on the opportunity to purchase your home.
One thing you can do to make the most out of entertaining multiple offers for your home is to be prepared in the first place. BEFORE you begin as an FSBO do some research on this scenario. Go onto pertinent websites, talk to experts, find out how you should best deal with this concept; should it arise. Practice your negotiating techniques of this type beforehand, then you will be ready to deal with it. Another thing you can do is to get to know each potential buyer when they begin to make an offer. Learn about any limitations they may have financially or even mentally. Perhaps their personality type makes them adverse to this type of negotiating deal. You will want to know that before telling them about other offers. The best advice you can get on this subject is – to be prepared!