How to Choose the Best Offer
While this market is nothing like the market of a year or two ago, there are still situations where listings are getting multiple offers. As a buyer, there are definitely ways to put your offer ahead of the rest (besides the obvious – price).
As a seller, if you receive more than one offer on your home, you may be tempted to pick the buyer who offers the most money. Or maybe the buyer who offers cash? While those two things are certainly in the plus column, they are not the only things to look for. Keep reading to find out how to pick the best offer!
Price. Ok, everyone wants to get the best price for their home, of course! But the price you see right up front on the first page isn’t the only thing you have to consider. One buyer could be offering a higher price, but asking for closing costs, or a home warranty. Take all that into consideration when you’re comparing offers to see which will actually net you the most money.
Type of financing. Cash is wonderful because you know it’s right there in the buyer’s bank account and is more or less guaranteed. But, at the end of the day (or at the end of the transaction), you will walk away with the same number on your check whether that buyer paid with all cash or an FHA loan. What you want to do is make sure they are very well qualified. You can do this by having your agent review their prequalification form or talk to their lender.
Contingencies. Another reason cash is great is because you don’t have to deal with getting an appraisal on your home. Appraisals can sometimes come in too low causing the buyer to need significantly more cash to close or even the sale to fall apart. Other contingencies to look out for could be that the buyer needs to sell a home before they can purchase yours, they want an extra long inspection period, or they have some other extenuating circumstance that the sale is contingent upon.
Timelines. One buyer may be offering $2,000 more, but wants to close in 60 days rather than the 30 days the other buyer is offering. If your mortgage payment is over $2,000, it might be better to go with the lower offer and close sooner. Other things to look out for with timelines are when buyers need to sell their house before buying yours. There are many ways this can go down. Is their house already under contract? Is it just new on the market? Are they going to do all their inspections right away, or wait for their house to go under contract? In some instances, they could be leaving a lot up in the air while you take your house off the market for a long period of time.
A weird ask. Some things can’t be given a numeric value and that’s where the weird ask comes in. Maybe you have an excellent offer but the buyer insists on the house coming with your great great grandmother’s piano that’s in the living room. Maybe they want you to remove a decorative fountain you spent a whole weekend installing. Some things are just deal breakers, and with the emotional nature of home buying, buyers sometimes feel the need for a very specific thing to happen. If it’s out of the question for you, maybe that’s not your buyer.
Your agent will go over any and all offers with you and make a decision based on your own goals and situation. The offer that’s best for one seller may not be best for another seller. But together with your agent (and with this blog post printed out for reference!), you will figure out the best route for you!