There are a few schools of thought on this one. Ultimately, it is the seller's decision on whether or not to disclose to all potential buyers that there is an offer on your home. And whether you should accept the first offer depends on your time on the market and whether the offer is perfect for your situation. Here is the scenario that led to this post:
"Our home has been on the market since before Christmas, but we have now moved out and lowered the price. We have received an offer but there are several showings on our house tonight. Are we required to let the other agents know that we have an offer?"
First of all, if you have received an offer, it is a starting point and you have not accepted it....yet. So the short answer is no, you are not required to say anything to other buyers' agents. But remember that there is no "second place" winner for potential buyers. There is only one winner! As the seller, you have to decide what is best for your situation and if you are willing to take a risk.
Here are your options and the advantage/disadvantage of each:
1. If the first offer is the price that you want, the closing date works for you, and the numbers make sense, you could accept it and stop the additional showings from happening. The advantage is no more showings and getting the house ready! The disadvantage to accepting the first offer is that multiple offers can create competition and a higher price from buyers.
2. You could instruct your listing agent to contact all agents that have shown the house recently to let them know that you have received an offer. Based on when you need to respond to the current offer, you can ask for any offers to be submitted prior to that time. The advantage is that if the current offer is less than you would like, another offer would trigger a "highest and best" scenario which would allow both buyers the opportunity to amend their offer if they wish. Also, if another buyer is sitting on the fence or thinking about your home, they may be willing to throw their hat into the ring. The disadvantage of this is that the current offer could retract their offer and walk away when faced with a competition. (This is why you do not inform the first buyer of a competing offer until the second offer is physically received.)
3. You could instruct your listing agent to contact agents that have a scheduled showing (where the buyer has not seen the house yet) and let them know that you have an offer on the table. The advantage would be that if the buyer really likes the house, they would be better prepared to offer their highest and best. The disadvantage may be that the buyers do not wish to compete and they cancel their showing altogether and cross you off their list.
4. You could instruct your listing agent to call each showing agent after the showing has occurred to gauge interest. If the buyer's agent indicates that your property is "on the buyer's short list" or "in the top three" or the buyer's agent asks to be notified if an offer is submitted, you could allow your listing agent permission to share that you just received an offer. If the second buyer submits an offer, your listing agent will need to call the first agent to let them know that they are competing and to give them the opportunity to change their offer prior to a specified time.
Depending on the offer that you have, the time that you have been on the market, and your reason for selling, there are many options when handling an offer. You always have three possible responses: You can accept, you can reject or you can counter. And the buyer has those same options available to respond to you.
This is why you want to have a professional agent representing your home and negotiating on your behalf. It is up to you as the seller to determine how you want to handle the offers that you receive. Your agent should know the market and be able to provide recommendations on price and negotiation tactics to help get the most for your home. If you are thinking of selling your home in 2019, I would love to talk to you about how we can work together to achieve your goals.