Multiple Offers in QLD: How the Process Works and What Agents Must Do

In this video we explain MULTIPLE OFFER SCENARIOS in QLD – what to do and how to approach the situation for Queensland Property (Real Estate). The video includes best practices, risks, must-do’s and so much more.

This blog discusses best practices, risks, must-do’s and so much more for multiple offer situation in Queensland property. 

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Hi everybody – George Sourris, Empire Legal.

Today’s topic: MULTIPLE OFFER SCENARIOS

What is a multiple offer scenario?

We are going to explain it here – in simple terms.

People don’t understand the process.

The market, as at today, February 2024, is a seller’s market – meaning that there is limited housing stock available.

This gives the seller an advantage – being able to achieve a high price –  due to large buyer demand and limited stock available to purchase. 

Occasionally prospective buyers have complained that agents tell them there are other offers on the property, in order to secure a higher price for the seller, when in fact there may be no competing offer or offers. There are heavy penalties for agents who mislead or deceive buyers by telling them there are competing offers when there are not.

What law governs multiple offers in Queensland?

In Queensland, there are several options available in a multiple offer scenario to the vendor. They can choose to accept the higher offer, negotiate with a particular buyer, or reject all offers. Keep in mind  that a vendor does NOT have to accept ANY offer, even if it’s the first offer or the highest offer.

How should the multiple offer process work?

If a prospective buyer wishes to revise their offer, they should consider making the offer more attractive i.e. – more appealing terms – so less conditions, a higher deposit, faster settlement, or a higher purchase price.

This is the buyer’s chance to put their best foot forward to secure the property and get their offer accepted.  This approach alerts the potential buyers to the existence of other offers and provide them with an opportunity to make an increased offer to purchase the property if they wish.

What must an agent do in a multiple offer situation?

1 – Advise the potential buyers that the seller has received other offers before they’ve executed a written contract of sale.  In disclosing the existence of further offers, agents should be mindful not to disclose any details of the offers to the other potential buyers.

2 – Approach the potential buyers and provide them with a timeframe within which to provide their best and final offer to purchase the property.

3 – the offers are to be presented to the seller.

4 – if the agent has been instructed to advise the potential buyers to submit their best & final offer, it should be stressed to the seller that these offers should not be used as a means to commence further negotiations with the potential buyers.

5 – a written acknowledgement should also be obtained from the potential buyers that they’ve been informed of the multiple offers. If the seller considers this course of action to be appropriate, the agent should ensure that they obtain instructions from the seller client, in writing.

Agents should also ensure that they keep detailed file notes of their conversations with their seller clients, and or potential buyers.

It is important that agents are aware that they can be investigated by the Office of Fair Trading following a complaint from a potential buyer.

The agent would have to produce evidence of the existence of other potential buyers and higher offer. This is why we suggest you always use the multiple offer forms, every time. Agents – you need to protect yourself and comply with the law.

A multiple offer situation can be stressful for property buyers in Queensland. Our experienced team can help you navigate this process.

We are here to help.

A special shout out to Mr. Alec McEwan from McGrath Bayside Wynnum Manly for this blog suggestion. 

Thanks guys.

See you on the next one.

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George Souris. Empire Legal.

If you have any questions, you can email me: george@empirelegal.com.au.

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Thanks for reading everybody. See you on the next one.

Ladies and gentlemen, please keep in mind that all advice is general in nature and does not constitute legal advice. This is authorised by George Sourris, Empire Legal, Gold Coast, Queensland, Australia.

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Does the seller have to tell you there are other offers?

No. There is no obligation on a seller or an agent to tell you that you are in a multiple offer situation, and no obligation to run a formal process at all. A seller can accept the first offer they like and ignore the rest.

What an agent cannot do is mislead you. Inventing competing offers to push your price up, or misrepresenting where your offer sits, is conduct that gets licences suspended.

Can a seller accept two offers at once?

No. A contract forms when an offer is accepted and communicated. Once the seller signs and that acceptance is communicated to a buyer, they are bound. Signing a second contract over the same property exposes the seller to a damages claim from whichever buyer misses out.

Where sellers get into trouble is signing a second contract as a “backup” without understanding that the first one is already binding.

Should you offer over the asking price in a multiple offer situation?

That is a commercial call, not a legal one, and it depends on whether you would regret losing the property more than overpaying for it. What we would say is narrower and more useful:

• Do not strip your conditions to win. Waiving building and pest or finance to look attractive converts a negotiating loss into an uncapped financial risk.
• Shorten your timeframes instead. A 14 day finance clause is far more attractive to a seller than no finance clause, and it costs you almost nothing.
• Get your contract reviewed before you submit it, not after it is accepted. In a multiple offer scenario you will be asked to sign quickly.

What should a buyer do when told to submit their best and final offer?

Treat it as a real deadline and assume you get one attempt. Put your genuine number in, keep the conditions you actually need, and make the rest of the offer as easy to accept as possible: a deposit that is ready, a settlement date that suits the seller, and evidence your finance is in order.

And get advice before you sign, not after. Once your offer is accepted and communicated, you are in a contract.