A seller's market, in one in which competition for houses gives a seller the advantage! It is the result of all kinds of things we do not have control over, from the economy to the sudden and amazing popularity of any given city or neighborhood.
When this happens, home prices tend to rise with the demand, and home buyers are much more likely to meet or even exceed your asking price! They may even throw in bonuses, or eve offer their firstborn baby - I think you get the picture! When the market is hot, you're hot, and the chances are very good that you will be faced with multiple offers.
If you have a listing agent, this will be one of those times when you will be glad you do, as he or she will be able to lead the process and handle all the finer points of the negotiating! The other most important tool that you can bring into a multiple-offer scenario is an awareness of the legal land mines, and of course a sense of ethics, and lets not forget negotiating etiquette!