Two days ago I saw something new – a multiple offer addendum prepared by the buyers’ agent. In essence, the buyer is making offers on multiple homes all at the same time.
Normally, once a seller accepts an offer and returns to the offer to the buyer (or her agent), you’ve got yourself a binding contract. Not so in this case as the language says the contract isn’t really a contract until the buyer affirmatively signs to agree to the sellers’ acceptance.
On the one hand, it’s admirable for the buyer and his agent to let the seller know that they are writing offers on several properties at once. Most would not do that. But on the other hand, does such an addendum help in negotiations? The tone seems to be one of “take it or leave it” but that doesn’t mean the seller necessarily ought to “take it.”
Buyers in Arizona, if using the standard AAR Purchase Contract, have a 10-day inspection period during which they can cancel the contract for any reason – they need only a reason. Which is why it’s rare for a buyer or buyers’ agent to disclose multiple contract are being written. If more than one’s accepted, keep one and cancel the others during the inspection period. (Not the best scenario for sellers, but we’re talking about the buyer’s side.)
Language requiring an affirmative acceptance beyond the normal signature isn’t new – it came almost directly from AAR’s Multiple Counter Offer form. When confronted with more than one offer, the seller has the option of countering just one or countering multiple offers. Affirmative acceptance is necessary because if the seller were to counter two offers on the regular counter offer forms and both buyers accept, the seller has no way to cancel one and they now have their home under contract twice.
Multiple Counter Offers do not need to be identical. In other words, sellers can have different terms on the counter offer sent to each buyer.
The biggest risk, of course, is that all the buyers elect not to accept the counter and the seller is left still trying to find a buyer. It happens. But the best case scenario is one where there are serious buyers desiring this one home and the extra offers provide the needed leverage to get the seller a higher net than they might normally expect.
Multiples are extremely common on bank owned homes in the Phoenix real estate market these days, less so on owner-owned homes … but they still happen.
Buyers’ multiple offer addenda? Those still are blessedly rare.
[tags]Phoenix real estate, AAR purchase contract[/tags]