Buyers Making Multiple Offers. What the........................?

I can't speak for anyone else and I can't speak for Georgia law, but this is how I've done things in Florida. 

Earnest money deposit.  Our office policy is to never collect a deposit check until after an offer gets accepted unless the check is already deposited into a title company escrow account (which is seldom, if never).  We always put due within 1 day (or more) after acceptance. So many Realtors seem to think that a contract is not valid without a deposit.  Totally wrong.  A contract is not valid without CONSIDERATION.  And the consideration in the contract is the agreement to pay the purchase price for the property.

I can't imagine anyone caring whether a buyer is buying more than one property.  Why would it even matter?  I remember back in 2003 where I bought 3 properties within a week's time - all distressed deals.  Even today I have buyers buying multiple properties. It's a numbers game for investors.  You make 10 offers to get hopefully 2-3 accepted.

I can't imagine there being a problem with writing multiple offers...especially with the criteria you talk about - We encourage regular homebuyers (non-investors) to put multiple offers on REO/short sales.

You have to unless you have 6 months to find a property.

Hmmm, I guess your approach makes sense, especially for investors.  I have never encouraged my buyers to make for than one offer at a time but I don't see why one couldn't do exactly what you are doing in any state.  As you have said, even if the EMD is part of the contract, if the contract is not accepted by all parties then there is no risk. The only time I could see this as risky is when a buyer is writing full price...or if the seller accepts the offer with no changes.  It might get a bit dicy to refuse to acknowledge the acceptance.

I've submitted multiple offers for my buyers before and always add:

1.  ED to be received within 2 days of accepted offer.

2.  Contract not valid until buyer signs again here _________________________________.

very interesting all these varying requirements.

here in Florida the standard is Escrow of $XX will be deposited upon acceptance.   A salesperson must deposit a received escrow into an account within 24 hours, or must give it to the Broker who has 48 hours.   So I just have my clients write a check to teh title company, make a photocopy to send with the offer, and than have them tear up the check.  Typically  a copy of escrow is only required in SS  & REOs.  And since they take so damn long to reply, I am not going to have my clients tie up escrow monies for an indefininte amont of time.

Now in Florida a contract is not legally binding until it is signed by all parties, returned to the buyer fully executed, and Accepted by the buyer.  so just because you put in multiple offers it does not mean that if you have multiple acceptances that your client is bound to any of them.   Plus I use 24 hour to 48 hour offer expirations so the offer has usually expired by the time they get back to us to accept.  On top of that I encourage all my Buyers to do As-Is Contracts so they can break it anytime during the inspection period, no questions asked. 

Now a client Plymouth, MA who is now a friend can not believe how real estate is done down here.  He actually said 'it's like we are in another country' LOL

almost forgot about the original topic: Multiple offers I am sorry, but I usually have buyers submitting multiple offers.  Not on one day, over the course of time, because negotiations are taking longer, Listing Agents are 'holding out for more money' and way too many deals fall apart before closing.  I believe last month 1/2 of all our firms contracts fell apart before closing. 

So some may not like it, but i think it is in my Clients Best Interests to find them as many oppurtunities as possible, given the low contract to closing ratio here.   Afterall for most people there is not Just One perfect fit house.  And I do not care if my buyers have a contract, have mortgage approval and have finished inspections, I still encourage them, although i encourage discretion, I encourage them to keep looking at houses, in case the current deal falls apart.   Hopefully things wiill stabilize soon, but for now this is what is in my buyers best interest.   As far as telling a seller whether my buyer has multiple offers, I see it as none of their business, just as i see it as none of a buyers business how many offers my seller has.

I advise my buyer clients to make multiple bids all the time.(sometimes on properties that neither my client nor I have seen) As I see it there is only one danger and that is the possibilitiy of multiple acceptances at the same time. My protection is the inspection clause in the Florida Far-Bar as-is contract. I specify an inspection period within which my client can withdraw his bid for any reason. I also set the date for the good faith deposit to coincide with the end of the inspection period. 

Cash buyers can make as many offers on as amny properties as they wish. Whose business is it if they do? If they have the funds to follow through on all of them, then great! That's the only thing that should really matter.

It is in our contract, but it is not law.  If you choose not to disclose this to be a legal and binding agreement it should be "struck" from the contract and not just left blank.   Contract classes teach us that we don't just leave blanks.  And you DO NOT have to have any earnest money in Georgia so long as you disclose the fact in the contract.  And BB,  just for fun, if you want to take a look at the GAR purchase and sale agreement I'd be happy to email you a .pdf of it if you send me your email address via AR.  I don't think I can attach it to a AR email from my end to get it to you.

Bryant, in your market working with REO listers and investors, I would do the same thing. As to reputation, everyone knows what agents have to do to get the job done for the buyers, especially in Poinciana.  As long as your deposit is contingent on acceptance of the contract, you're fine. States that haven't had the firestorm of short sales and foreclosures that we have can afford to operate differently.

Sharon

I have customers who do put in offers on multiple properties on REOs but especially with short sales because they take for ever and ever without certainty of success.  Should they wait a few months for an answer and then find another property to make an offer on? I think not. Unless the banks do speed up their processing time and make it easier for willing and able buyers to actually buy, this mind set will not go away.

I live in California....

Each time I submit an offer, I do get a check from the buyers for the initial deposit. But I only submit a COPY of that check with the offer. The check is held in safekeeping at my broker's safe until there is an accepted offer. Immediately after we receive confirmation of a formal acceptance, we open escrow and deposit that check.

On Short Sales, we have an addendum where we specify how many days our offer is good for --- 45 days is probably the norm. We check a box if we want that initial deposit check UNCASHED until there is formal acceptance.

On REOs, even if the listing agent gives me a verbal...I don't start the escrow process until I get the formal written acceptance. One listing agent told me my offer was accepted ....then he calls me back the next day to tell me another offer came in, and would I resubmit my client's best and highest offer?

In my neck of the woods, the entry level market of $300K and below is overheated. One property received 80 offers; another had 60. Last Friday, I wrote an offer on a property that was just listed Thursday, and they already had 25 offers. Even after writing an offer for $30K over list price with shortened contingencies, we still didn't get it.

So why shouldn I write multiple offers for my clients? If we get accepted, then we move forward with the accepted offer and withdraw the rest. Some of these listing agents are so busy fielding offers, that one of them has even told me it won't hurt her feelings if I withdraw.

Pacita That is interesting.  In Florida I have only 24 hours to deposit earnest money in an escrow account.  If I give the check to my broker he has 48 hours. 

Great subject with great discussion.  Thanks everyone.

All banks submit addendums back, which is essentially a counter offer.  So if a buyer doesn't have multiple pokers in the fire in this market then they might not get any house.  I had the same situation as Konnie.  Accepted the terms and sent over the addendums which my buyers signed(against my advice since they wanted all contingencies automatically removed within 17days, which is impossible) and had them back.  In transmit hell, the agent emailed me and said highest and best right now!  My clients were pissed.... so every buyer needs to do what's best for them

My buyers have all written offers on multiple homes. You have too, you can't wait around on one offers for weeks even months to hear from these banks. That means I would be working with one buyer for over a year. I think 6-7 months right now is long enough. Buyers are always having to put their highest and best, how does one Really know if there are other offers on the home? You don't you are taking the listing agents word when they send over the mulitple offer form to be signed. It's all a game and one that buyers are getting tired of playing!

I see this is a few years old.

In CA now we can wire transfer EMD into escrow within 3 days after acceptance.