Selling your Chicago-area home in the midst of multiple offers on a house in the Chicagoland can be exciting and overwhelming. Chicago’s real estate market is still hot, so many sellers have homes with multiple offers in the Chicago market now. Inventory is low and demand from buyers is high: homes lingered just around 54 days on market in late 2024, and “with inventory levels staying low, sellers tend to have multiple offers and prices above asking”.
In this competitive market, being able to decide between multiple offers is important. This informative guide by 23 Legal combines good-natured advice and trusted legal expertise to assist sellers through multiple offers. We’ll cover what multiple offers mean in Chicago today, how to evaluate bids (price, financing, terms, timeline, etc.), legal do’s and don’ts (seller rights, disclosure rules, escalation clauses), red flags to watch, and why working with an experienced Illinois real estate attorney can protect your deal.
Let’s dive in with a clear, step-by-step approach for Chicagoland home sellers facing more than one offer.
What Multiple Offers Are – and Why They’re Common in Chicago’s Market
A multiple-offer situation is where two or more buyers make an offer on your house around the same time. Home selling with multiple offers in Chicago in today’s real estate cycle has become the common. The simple explanation is a time-honored one: high demand vs. low supply. Recent data affirm that Chicago is a solid seller’s market. Actually, a September 2024 market report observed Chicago sellers have an “unmistakable advantage” since “high demand and limited supply” have ruled throughout the year. With numerous enthusiastic buyers scrambling over scant homes, it’s no surprise that a sizzling listing might amass 2, 5, or even 10 offers in a matter of days. Some areas (hot spots such as Logan Square, Lincoln Park, or suburbs close to the city) experience bidding wars easily.
Key factors fueling multiple offers in Chicagoland:
- Low Inventory: There simply are not enough houses on the market. As of late 2024, there were only around 5,300 single-family homes for sale in Chicago, and thousands sold each month. That mismatch results in serious competition between buyers.
- Strong Buyer Demand: Low interest rates and the need for space (post-2020 conditions) have maintained active buyers. When rates dip or local amenities attract, more buyers rush into the marketplace.
- Rising Prices: Chicago housing prices have been increasing year-to-year, so sellers should put properties on the market now. During an uptrending market, buyers tend to rush in, driving up several offers.
- Quick Sales: Properties are selling rapidly – sometimes within less than two months. When houses sell rapidly, buyers scramble to make offers to miss out.
Because of this, as a Chicago seller, you need to expect more than one offer. That’s great news for squeezing the highest price out of your sale, but it also calls for making decisions. Each offer will vary in significant ways – price being only one of them. The next section details exactly how to make the decision between multiple offers by examining all the important factors.
How to Choose Between Multiple Offers
When you receive multiple bids, the highest price is not necessarily the best. Realtors and lawyers concur: price is important, but it is not everything. You seek a good combination of a good price and good terms. Here’s what to compare in every bid:
- Offer Price vs. Appraisal Risk: An overpriced bid can be appealing, but think of appraisal. If the top bid is substantially higher than the market or appraisal price, the buyer can end up filling the gap. Look for an offer that waives or restricts an appraisal contingency. If not, an overpriced bid can fall apart at the appraisal phase or need to be renegotiated.
- Financing Type: Cash offers tend to close quicker and with less risk than those involving loans. If one buyer is paying cash (or substantially cash) and the other is financing through a mortgage, that cash transaction may be more dependable even at an equal price. If the buyer requires a mortgage, see what their pre-approval letter from the lender, reputation of the lender, and down payment percentage look like.
- Earnest Money Deposit: This down payment (typically 1–5% of the sale price) reflects the amount of money the buyer is committing. Bigger down payments reflect greater commitment. For instance, a $20,000 down payment on a $500,000 house is more convincing than a $5,000, as it is more difficult for that buyer to back out. You can ask your agent to compare each buyer’s down payment.
- Contingencies: These are conditions the buyer requires to close, like home inspection, financing, appraisal, or sale of their current home. Low-contingency offers are more desirable, since there are fewer conditions under which the transaction can fail. In the Chicago market, non-contingent offers tend to prevail. Avoid an offer that is contingent upon the buyer selling a property first – that adds uncertainty if their house does not sell. A cash “AS-IS” bid (no inspection or financing contingency) is particularly potent in some cases.
- Closing Timeline: How quickly do you each want to close? If you have time to move or if you’re flexible, that counts. Some buyers will want a rapid close (1 month), and others will require 2-3 months. Choose the timeframe that works with your schedule. (Also remember: an extremely rapid close might be risky if it cuts into inspection or prep time; too slow closing might encourage a buyer to walk away if mortgage rates increase.)
- Buyer Flexibility: Aside from the closing date, examine other conditions. Does the buyer ask for rent-back (stay in the house a month after closing), add seller concessions (such as paying some closing costs), or have strange requirements? A very particular buyer will make post-offer negotiations more challenging. On the contrary, a buyer who is willing to waive small requests (such as cosmetic repairs) is more cooperative to deal with.
- Inspection/Repair Requests: If several visits have occurred, check if any offers are “come as is” or relinquish the right to request repairs. The fewer repair hurdles, the easier your journey.
- Proof of Funds/Preapproval: Make sure buyers have provided a mortgage pre-approval or evidence of funds. An offer is only valid if the buyer is actually in a position to pay. If someone has a big price but no lender support or cash documentation, that’s a risk.
- Comparable Value: Compare every offer to comparable recent Chicago sales. An offer that’s just a little higher than the asking price in a very hot market may be low, while an offer that’s much higher may barely meet what others are paying. Discuss current comps with your agent.
As an example, let’s say you have two offers. Offer A is $550,000 cash with a 30-day close and a $20,000 deposit, no inspection contingency. Offer B is $575,000 but comes with a 60-day close, only a $5,000 deposit, and a financing contingency on a 3.5% loan. Even though B is priced higher, it’s riskier (loan delays, low deposit, long time frame). Present A’s price, though not as high, can convert faster and more cleanly. Who is actually providing more value?
Real estate professionals highlight this point. NAR states that things such as “financial terms, contingencies, closing timeline, and earnest money deposit” can make a lower-priced offer stronger in total. In other words: balance the whole deal.
- Negotiable Terms: Also, think through what you can counter. A top bidder may still take a little counter. If Offer B’s financing is the delay, you may counter with a bit higher price if they eliminate some contingency. But keep in mind: any counteroffer that you make invalidates the original offer. You cannot revert to an earlier offer once you counter.
- Highest and Best: In reality, many sellers may set a deadline for all prospective purchasers to submit “highest and best” bids. This entails informing everyone that you have various bids and requesting them to submit their best final offer by a specific deadline (e.g., the end of the week). Legally, seeking the highest and best effectively rejects current bids, forcing purchasers to move up if they so desire. This method can raise pricing, but be cautious: you risk losing a bidder who believes their previous offer was already fair.
When considering proposals, creating a chart or table can be helpful. List each buyer, including columns for price, financing, deposit, contingencies, closing date, and so on. Score or highlight the advantages and disadvantages. If something is unclear, do not hesitate to approach your agent for more information.
Key Takeaway: Always look past the numbers. A smart seller examines all terms, not simply dollars. 23 Legal’s tip is to consider every offer with skepticism and curiosity: check funds, request missing information, and compare how each will meet your objectives.
Legal Considerations When Handling Multiple Offers
Multiple offers are not only a strategic dilemma – they’re accompanied by legal landmines as well. You have rights and responsibilities as a seller in Illinois. It’s important to know them to prevent issues:
- Seller’s Final Say: The seller chooses whether or not to accept one of the offers (if any) – you’re not required to take the highest bidder or any specific offer. Illinois law and Realtor ethics provide the seller with significant latitude. For instance, you can specify ahead of time the conditions under which you’ll view offers (e.g., a minimum price or no financing contingencies), as long as those conditions do not break fair housing (you can’t discriminate based on race, religion, family status, etc.). The listing agent is obligated to comply with your requirements. Some sellers insist on writing: “Do not make offers below $X or with any inspection contingency.” That’s okay, but use it consistently so you do not unintentionally discriminate.
- Handling Submitted Offers: Illinois REALTORS® explain choices once offers come: you may accept one “best” offer (best as you define it, which isn’t always highest price), or you may request highest-and-best from all (notifying buyers others are available). You may also counter one and reserve others, or counter one and reject the others. Each option has drawbacks. Watch out: counters and acceptances are legally enforceable. If you accept an offer in writing and both parties sign, you have a binding contract (subject to any contingencies). You usually cannot accept a second offer without validly ending the first contract. If a seller attempts to walk away on a previously signed contract without a valid reason, the initial buyer can sue you for specific performance (making you sell). Never double-contract. In case you receive a better second offer when there’s an existing first contract, seek the advice of a lawyer before acting.
- Disclosing Multiple Offers: Sellers often wonder if they need to inform buyers about other offers. The answer: No legal requirement to offer that information voluntarily. As a matter of course, your agent should not disclose information about other offers without your consent. According to the Code of Ethics, a broker requires the seller’s permission to indicate “there are offers.” Even if you do grant permission for disclosure, an agent only needs to verify if offers were made if a buyer asks specifically (and only with your awareness). Bottom line: you are in charge. Sometimes sellers like to inform buyers that it’s competitive (to encourage final offers), but it’s not necessary. If you do say to everybody, “highest and best,” that’s an official rejection of all existing offers and a new process.
- Escalation Clauses: Most multiple-offer situations involve buyers employing an escalation clause. That is, Buyer #1 is indicating “I bid $X but if you receive a higher offer, I will top it by $Y to a limit of $Z.” Escalations are not against the law in Illinois, yet they have drawbacks. One danger: the seller perceives the buyer’s highest cap (they’ve “shown their cards”), which has a chance to anchor expectations. Also, the clause can create a false illusion of security – the buyer may not close at that high price or may believe they’ll always be a winner. Illinois professionals recommend that sellers decline escalation clauses by specifying (on the MLS or in writing) that fixed-price offers only will be considered. If you do accept an escalation offer, think about counteroffering it with a firm price anyway. And have legal counsel thoroughly review any complicated clauses: as Illinois REALTORS® advise, “legal counsel should be consulted” in such cases.
- Fair Housing: A quick aside – whatever your approach, never make decisions on a buyer’s race, religion, family status, source of funds, etc. That’s against the law (Federal and Illinois fair housing laws). That includes loose language such as “No single women buyers” or “only looking at local buyers.” Use objective factors such as price and terms.
- Disclosure Rules: In Illinois, you have to provide a completed Residential Real Property Disclosure Report to the buyer (it itemizes known defects in the house). Multiple offers don’t change it – even with plenty of buyers, each has to receive the same disclosures. Sellers should also stay away from misrepresentation or omission of information regarding the property. If a buyer in a multiple-offer situation perceives that a disclosure was missing, it can expose you to legal claims down the line.
- Dual Agency Situations: Although less about multiple offers, remember that Illinois permits dual agency (agent representing buyer and seller). If this occurs and you’re a seller, you’ll want open communication that the agent is not biasing for you against the buyer (or vice versa). Having your own attorney can level the playing field.
In short, you can choose the offer that suits your priorities. But keep in legal bounds: abide by your agent’s recommendations, apply any criteria equally, and consult a lawyer prior to taking any action that may constitute two concurrent contracts.
Red Flags to Watch For
With more buyers in play, be alert to offers that look good on paper but carry traps. Common red flags include:
- Too-Good-To-Be-True Price: A much larger price than similar homes may look wonderful, but read the terms. HomeLight cautions that “the highest offer is sometimes not the best offer”. For instance, a cash buyer might bid over a huge amount to get the house but then use the inspection contingency to ask for extensive repairs or a reduction in price later. Always confirm any buyer’s financing and motivation before basking in the big number. If they’re putting up $30K over asking with only a $1,000 earnest deposit, ask yourself why such a low deposit?
- Weak Earnest Deposit: At a high price, a small deposit implies low commitment. (If the buyer defaults, you must start over.) Ideally, deposits should be 1–2% of the price. If one bid is putting $10K on a $500K home and another is putting up $30K, that’s a distinction.
- Heavy Contingencies: Any out-of-the-ordinary or numerous contingencies can derail a deal. As an example, a home-sale contingency (buyer to sell his own home first) is typically a deal-killer in this market today. Also, be cautious of a buyer requesting unusually prolonged inspection or financing timelines. Industry practice is an inspection contingency of 1–2 weeks; anything longer could hold up your property too long.
- Poor Financing Approval: If the buyer’s mortgage approval is new or in doubt, that’s risky. Ensure that the buyer has lender pre-approval from a well-known bank. A pre-approval letter dated months prior to renewal may be stale.
- Appraisal Gap Issues: If the bids are far in excess of value, see if anyone has waived the appraisal contingency. If not, and the property appraises for less, you might have to renegotiate or find a buyer making up the difference. A red flag is an escalation clause that does not promise plugging appraisal gaps – a buyer could walk if appraisal kills the deal.
- Demanding Unusual Concessions: Be on the lookout for the buyer requesting personal goods, extensive upgrades at your expense, or other unusual terms. Although asking for seller concessions (such as some closing costs) is negotiable, when one buyer’s requests are unreasonable (for example, paying for a new roof at $20K), that reduces the effective value.
- Lowball After Inspection: An offer can have a built-in strategy: drastic phrasing such as “Price is firm, but inspection will result in an addendum requiring extensive repairs.” That’s basically making an ask to renegotiate down the line. Serious buyers can ask for repairs, but mind your tone.
- Lack of Communication or Representation: If the offer arrives late on a Friday evening at 11:59 pm with “take it or leave it,” it could be a sign of an amateur attempt to corner you. Likewise, an unrepresented buyer (no agent) can be challenging to negotiate with or delay closing because they lack experience.
One example from practice: A seller was presented with two offers, one for $500K cash with minimal contingencies and the other for $550K but with the condition that the buyer’s house must sell. The $550K offer seemed more desirable on paper, but because the seller wanted assurance, they ended up taking the $500K cash offer. The higher offer later failed when the buyer’s house did not sell within the time.
Trust your instincts, and get advice. If something seems fishy, ask your agent and lawyer. Professionals advise sellers to check funds and not get tempted by a large figure. Better a strong but slightly lower offer than an uncertain one that falls through.
Why Work With a Real Estate Attorney (23 Legal) Helps
Dealing with multiple offers on the house need not be a solo journey. With 23 Legal, our Illinois real estate lawyers are experts in safeguarding sellers like you. Here’s how we can assist you in getting the best value and preventing problems:
- Contract Review & Negotiation: There is a contract with each offer filled with legal jargon. We closely examine the fine print. An Illinois real estate attorney can look over or even write the purchase agreement to ensure it’s equitable. Here’s a typical situation: a contract has vague language regarding who covers some repairs upon inspection. We identify those vagaries. As one Illinois lawyer put it, an experienced legal eye can detect “nuances that put at risk your interests,” such as provisions that allow one party to walk away while taking away from the other. We also negotiate on your behalf; it’s simpler for an attorney to resist unjust terms or request seller-friendly modifications. Our involvement can actually enhance your offers prior to acceptance.”.
- Title & Disclosure Checks: Before finalizing, legal matters such as liens or zoning offenses can upset a sale. We do title searches and ensure there aren’t unknown encumbrances. If anything comes up (e.g., an old lien or an inspection required for an addition), we guide you in repairing it now, not later. An attorney can also ensure your Seller’s Property Disclosure (mandated in Illinois) is accurate and complete, so you aren’t left with future liability.
- Compliance & Risk Reduction: Real estate regulations and laws can be tricky. For instance, Illinois contracts typically have an “attorney review” clause (as many as five days). Not all sellers are aware of using that loophole. We ensure all timelines (inspection, finance, closing) are fulfilled according to the contract agreement. When we notice any aspect of the sale not being in accord with Illinois law or MLS regulations, we correct it. This advanced legal monitoring can avoid conflicts. As one Illinois law firm states, including an attorney minimizes the chances of legal problems disrupting your sale.
- Exclusive Representation: Unlike agents (who are legally allowed to represent both buyer and seller in Illinois), attorneys are bound to represent just one party. That is, 23 Legal only represents you. We are not conflicted. We represent your interests and negotiate separately from the buyer’s party. This avoids any conflict of interest that could delay negotiations.
- Peace of Mind: Selling your home is stressful. Our role is to ensure the process is as seamless as possible and as little stress as possible for you. We walk you through each document and legal step in plain terms, so you can sign with confidence. Having a lawyer on your side spares you a lot of surprises. As one Illinois attorney described it, early involvement by an attorney saves worry, because “the sooner you engage an attorney… the more legal advantages you can gain.”.
- Dispute Resolution: If an unfair backout or missed deadline is attempted by a buyer, we can assert our rights. With an attorney, you’re less likely to get taken in by a quick trick or have the sale suddenly cancelled unjustifiably. If an argument occurs, we resolve it quickly, before a lawsuit has been filed.
23 Legal’s depth in Illinois real estate law is precisely why we advise all home sellers to have professional guidance. We will review any offer or counteroffer from contract to closing. You’ll get personalized advice on contingencies, closing timelines, and any unusual terms. In a city like Chicago, with its unique market quirks and legal requirements, our experience pays off.
Reducing Risk: Key Takeaways & Next Steps
- Analyze beyond price: Always compare financing, contingencies, deposit, and schedule – not just dollars.
- Protect yourself legally: Never accept a backup offer until the first contract is officially voided or settled.
- Avoid bias: Use consistent criteria to choose among offers, keeping fair housing in mind.
- Beware escalation clauses: Consider rejecting them or countering with a firm number.
- Trust the documents: Read all contract language carefully, or let a lawyer do it, before signing.
- Call an attorney early: 23 Legal can step in even before you list, or as soon as offers start coming, to guide you.
Contact 23 Legal for Seller Representation
If you have more than one offer on the house (anticipate having), don’t navigate it alone. 23 Legal is a Chicago suburb real estate law firm committed to home sellers. We provide legal guidance for home sellers in Illinois, including complete contract review, negotiation assistance, and representation. Our lawyers are familiar with both Cook County and suburban marketplaces.
Ready to make the best decision? Contact 23 Legal today for a free consultation on your sale. We will discuss any purchase agreement, outline your rights, and guide you to select the winning offer confidently. Having 23 Legal on your side, you will get the best sale value and reduce legal risk. Call us now to receive expert seller-side legal advice and assurance with your Chicago home sale.
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Accomplish your real estate goals with 23 Legal: (847) 447-6004
Why Choose 23 Legal
23 Legal offers Real Estate and Estate Planning legal services to individuals, families, community associations and small business owners throughout Chicagoland. We know how intimidating “the law” can be. In fact, when most people think of law offices, they think of stuffy leather chairs, huge wooden desks and pompous lawyers who charge outrageous fees. That’s not us! We believe in 1-to-1; the same lawyer should work with you all the way through. Whether you have an estate planning issue, family trust concern, or you have a legal problem in regard to a new home, business, real estate or remodel, you need a lawyer who cares. That’s where Ben comes in! We are great listeners; more than that, we are lawyers who believe that our clients always come first.
