This is a common problem. The market is appreciating and homes are selling for more now than they were 6 months ago. Good news for Palo Alto sellers, right? It can be, but there are pitfalls.
If the offer you accept is higher than the market value of closed sales, not the ones that are pending and you know sold for $300,000 over asking, then you may run into issues if that offer is contingent on an appraisal. The appraisal will look at closed sales in the last 3-6 months, not rumors about the house around the corner.
When you get your 10 offers, and one is higher than all the others but contingent on an appraisal, just remember it is not going to appraise at the offered value and there may be another round of negotiations.
There are several ways to deal with this that should be discussed with your Palo Alto agent at the time that you look at offers. You can:
Take a cash offer that is not contingent on an appraisal.
Ask the buyer of an offer with a loan agree to make up the difference between the appraised value and the offer price.
Cross your fingers and hope the appraisal comes in at the offer price and if it does not, negotiate the price you are willing to take and the buyer is willing to give. There may be other things about this offer you like so it may be worth it to take the most the house will appraise for even if it is less than another offer that does not have an appraisal contingency.
What you should not do is pretend this is not an issue and not deal with it with your Palo Alto agent up front.
If you have any questions about buying or selling a house in Palo Alto please feel free to contact me.