Categories: Hoboken Condos
In the current, heated Hoboken real estate market, multiple offers are a fact of life. It is up to the seller as to how to proceed when multiple offers are received. As an agent, I typically recommend that the seller call for everyone’s “final and best” offer by a given deadline. This allows all buyers the chance to increase their bid and participate fairly in the process. Normally, the seller does not disclose the amount or terms of the bids. The email we send out to all agents who had shown the property looks like this:
Thanks for showing 123 Main Street. We have received multiple offers for this property and the seller has asked for everyone’s highest and best offer to be in by Tuesday July 27th at 11:00 am.
Please submit offer in NJAR contract form, accompanied by a mortgage pre-approval or proof of funds, if a cash offer.
After the offers are reviewed, the sellers will choose with whom they wish to proceed and sign contracts immediately. We will change the status in the MLS to DABO and stop future showings of the property.
When submitting your offer, please use “H&B 123 Main” in the subject and summarize the offer in the body of your email with the following offer summary information:
- Purchase Price:
- Total down payment (amount/%):
- Amount of deposit to be paid after attorney review:
- Requested Closing Date (or range of dates acceptable to the buyer):
- Specific Inspection Terms, if any:
- Specific Appraisal Terms (does buyer waive all or part of the appraisal?):
- Specific Mortgage Terms, if any:
- Attorney Contact Information:
- Any additional Terms/Conditions:
Thanks so much,
Once the offers are received, we would sit down with the sellers and go through the terms of each of them, pointing out differences and the pros and cons of each. The seller then chooses with whom they wish to proceed. We notify the winning and losing bidders and once the winning buyer signs the contract, attorney review begins.
Here is the rub – under the Realtor Code of Ethics, a realtor is required to present ALL OFFERS to a seller. Agents know this and we have had situations where an agent came to us with an offer AFTER we conducted ‘final and best’. We are obligated to present the offer to the sellers. Under New Jersey law, real estate contracts do not become binding on either party until attorney review is concluded. Even though sellers had selected a buyer through the ‘final and best’ process, when presented with the newest, much stronger offer (both in terms of dollar amount and other relevant terms) they are free to accept the new offer. So what happened to ‘final and best’, you may wonder? Well, it has become a meaningless formality. Seller may be morally obligated to be true to his or her word but has no legal obligation to stick with the originally selected buyer.
Complications like this don’t happen often but it is becoming more common as the market remains so super competitive. Yet another reason why you need a seasoned, successful agent representing you no matter if you are buying or selling. Contact us to learn how we can help you meet your goals in this challenging real estate market.