How to handle a seller mentioning a competing offer after you've already made your bid

Verifying the competing offer's legitimacy

When a seller mentions a competing offer, your immediate reaction should be to gather more information, not react emotionally. Ask open-ended questions like, "That's interesting. Can you tell me more about that offer? What are the terms he or she is presenting?" Your goal is to understand the strength and specifics of this supposed competition.

Not all competing offers are equal. Some are real, some are just a tactic to push your price up, and some are from less serious buyers. Listen for details beyond just the price, such as closing timeline, contingencies, and whether it is an all-cash offer or subject to financing.

Reconfirming seller's original motivation

Before you get drawn into a bidding war, pull the conversation back to the seller's initial motivation. Remind him or her of the reasons he or she wanted to sell quickly or as-is in the first place. Say something like, "When we first spoke, you mentioned needing to close quickly because of [reason]. Does this new offer address that need as directly as mine?"

Often, a seller's motivation for a quick or hassle-free sale is more important than the absolute highest price. Re-establishing this original pain point can help him or her see the true value of your offer beyond just the dollar amount.

Adjusting your stance: re-anchoring or holding firm

If the competing offer genuinely seems stronger on price, you have a choice: re-anchor or hold firm. To re-anchor, you might acknowledge the new offer but then pivot back to the benefits of yours. "I understand that number sounds appealing, but my offer provides certainty with a fast, no-hassle closing, which you said was important."

Alternatively, if you believe your offer is already fair given the property's condition and your goals, you can hold firm. "My offer is based on the property's current condition and the efficient closing I can provide. I stand by that." This shows confidence and can sometimes call a bluff. Walking away is always an option if the numbers no longer make sense for you.

Using silence and third-party authority to your advantage

After you've made your point or asked a question about the competing offer, use silence. Let the seller speak next. This puts the ball back in his or her court and can reveal more about his or her true intentions.

You can also use a third-party authority to justify your position without making it personal. Instead of saying, "I can't go higher," you can say, "My acquisition manager's analysis shows this is our maximum for an as-is purchase in this condition." This removes emotion from the negotiation and attributes the limit to an objective external factor. This is not legal, financial, or tax advice; consult with professionals for specific situations.

Knowing when to walk away from a competitive situation

Not every deal is your deal. If a seller is truly fixated on a price point that makes the numbers impossible for you, or if he or she is using the competing offer to excessively play you against another party, it is okay to walk away. Chasing a deal that doesn't fit your criteria is a waste of time and resources.

Clearly communicate your decision to walk away: "Based on the information, it seems my offer isn't the right fit for your current needs. I wish you the best with the other offer." Sometimes, a seller will call you back when the other offer falls through, or if he or she realizes the other offer wasn't as good as it seemed.

You can learn more about how to approach these conversations on the /learn/first-call-with-a-motivated-seller or how to /how-to-work-your-leads.