Some time ago, I had multiple offers on one of my listings.  Two of the offers – let’s call them Buyer A and Buyer B, were for the exact same price.  Financially, we believed both offers to be equally strong but Buyer B had better terms – no inspection clause.  When faced with the two offers, the sellers chose Buyer A because they had spent a good deal of time at the open house and the sellers believed they wanted the house more.  I advised them to take Buyer B due to the better terms, but they preferred someone they believed wanted the house more.

We notified all of the offers of the result and hoped to quickly progress to closing.  Unfortunately, the day after we accepted their offer the agent for Buyer A called us and told us they were backing out.  The truth was, they were not telling the truth that they really wanted the house.  They did want us to accept their offer – but they had placed offers on several houses at a time.  Once they heard we had accepted their offer, they decided to buy another house.

Both I and my sellers were furious.  To make matters worse, Buyer B was so hurt his offer wasn’t accepted he did not want the house any longer.  Luckily, we had a third offer that did want the house – but it was for a lower amount.  We wound up selling the house for an amount less than what Buyer B would have paid.

After talking with other agents in my office, it seems that this is becoming a common phenomenon.  Buyers put offers on multiple properties at a time and then choose from among the offers that are accepted.  This is not acting on good faith at all.  When I see an offer for a house, I expect that the buyers mean to purchase the house as long as they can obtain financing and the house passes the inspection.

I have thought a bit about the best way to rectify this and I think that the MLS should add a clause to the listing agreement stating that the buyers agree not to put an offer on any other houses until the current agreement is null and or void – for instance the contract is not accepted, its time expires, or the property fails inspection.

If you are an agent that practices this, keep in mind that agents at offices like mine keep informal lists of agents who have done this.  Be assured that if you do this to myself or one of the agents in my office, on future attempts we will recommend to our clients that they not accept your offers unless your offer is the only one on the table.

However, I do this that the MLS can alleviate this issue by requiring buyers to add a checkbox that limits the buyers to one offer at a time.  If they do choose to put an offer on another property at the same time, they forfeit their earnest money if they choose the other property after the contract has been accepted.

I know this is a tough market and that buyers are jittery – but I want a solid promise that when you say you want to buy a house you mean it.