Negotiating tactics

C - Another Buyer: Should you Inform prospects about other bidders?

Multiple offers can unleash emotional responses:

When you tell good prospects that you are about to get another offer or that there is already another offer in the works, you run the risk of losing them. Many people in this situation are resigned to the fact that they're too late in the process or that their involvement could create a bidding war. 

In a down market, it’s also possible that they won’t believe you. Therefore, in a bad or slow market, handle multiple offers very carefully. They create problems so they shouldn't be fabricated.

If the situation calls for it, consider revealing to your prospects that there is interest from another party, but that "they haven’t put anything in writing yet." Refer to these other buyers as a couple from_______, or the “retired” couple, or some descriptive phrase that humanizes them and strengthens their existence in the minds of your current prospects.

Back up offers and bidding war losers:

When buyers lose in a bidding war, they often focus on the negatives of the house and rationalize why they will be better off without it. They always feel like they were treated unfairly and you, the seller, become the easy target. If the buyers with the winning bid should fall through, often the losing buyers have long since come to the conclusion that they are better off without your house.

Consider keeping the second buyers on the back burner as a potential backup, rather than engaged in the bidding with the possibility of losing them.

Another alternative is to advise the second bidders that you've been moving ahead with a contract from a "couple from Missouri" but should anything happen, you'll contact them. Let them know that you realize that they'll probably find something else but that the other buyers saw it and quickly made an acceptable offer.

This isn't a kiss-off. It shows empathy, sincerity and should keep you in good stead with these potential buyers.