The Complications Associated with Multiple Offers for Sellers and Buyers

By: Victor Normand
Published: May 2013

Most communities in Massachusetts are experiencing an increase in real estate activity.  Buyers have appeared in large numbers searching for homes among fewer offerings.  Statewide, the number of single family homes on the market is 17% lower than last year at this time.  The transition from a Buyers’ market to a Sellers’ market is in full swing, as evidenced by recent competition for listed properties.  In many markets, for properties in good selling condition, it is not uncommon for there to be multiple offers on homes almost as soon as they are listed for sale.

As this chart shows, the number of days on market is trending down, and the ratio of list price to sale price is getting closer to 100%.  Both of these statistics document the stories of anxious Buyers eager to make a deal.


For Sellers and Buyers, and often their Agents, this is an experience not seen for some time.  Handling multiple offers is a matter of law and ethics; best handled by heeding the advice of lawyers and experienced REALTORS®.  Multiple offers improperly handled can cause extended delays for Sellers, serious disappointment for Buyers and the threat of lawsuits for all concerned including real estate agents.

In Massachusetts, all offers whether written of verbal must be presented to Sellers, however, the verbal acceptance of an offer is not a binding agreement, except in certain instances where electronic communications may be determined to have met the requirements of law, known as the Statute of Frauds.  If that does not clear things up, consider the instance where a buyer requests that an offer to purchase be kept confidential.  If a Seller accepts such a condition, the Seller is only bound by that agreement until the offer is rejected.

Now consider the situation where a Buyer’s Agent asks a Seller’s Agent if there are other offers on a property.  Is the Seller’s Agent allowed to reveal the existence and terms of other offers?  The answer is, maybe, depending on the pre-determined instructions of the Seller who may want none of the terms revealed, some of the terms, or all of the terms made known.

In the instance of multiple offers, Sellers can accept one offer and reject the others; they can reject all offers, but make a counter offer to one; they can reject all offers and continue to market the property; or they can reject all offers, but give all buyers an opportunity to submit their highest and best offer.  Sellers can also reject all offers and make counteroffers to more than one Buyer, though that requires exceptional skill and timing and is rarely recommended.  The key to success and to avoid a bad faith claim is to anticipate multiple offers and have a written disclosure approved by the Seller.

Handling back-up offers is no less complicated.  Rarely is it advisable to accept a back-up offer without consulting  an attorney.  While state regulation requires  submission of all offers to Sellers up to the signing of a purchase and sale agreement , there are no regulations governing back-up offers.  Complications could arise that might place the Sellers in the position of being obligated  to sell the same property to more than one Buyer.

Where does all this leave Buyers and Sellers?  Where we often end up, working with a trusted advisor, or as we call ourselves, a Resident Expertsm.