In today’s real estate market, you are likely to receive multiple offers on your home. While that may be exciting, choosing the right offer isn’t as easy as it sounds. The best offer on your home isn’t always the highest, and there are several components you need to consider before making your final decision.
Have your agent help you determine your priorities
It may be tempting to take the first offer that comes your way or be tempted by the highest priced offer. However, the price is just the starting point. Before you list your house, you should come up with a list of priorities. Work with your real estate agent to determine the most important factors.
If quickly selling your home is the top priority and allows you to close soon, it may be a better offer than a higher price but longer closing time. Another consideration is your financial situation. If one offer includes some expensive home repairs, but you don’t have the cash flow to complete them, it may be better to accept an offer that doesn’t include those repairs.
The more upfront and open you can be with your agent, the better they’ll be able to guide you toward choosing the best offer for your situation. A professional agent has your best interest in mind and wants to help you succeed with the sale of your home.
Buyers can put any type of contingency in their offer. A contingency is the buyer’s conditions that they request be met before they agree to purchase the home. They aren’t necessarily deal-killers, so it is important to consider them before you reject an offer with contingencies.
Common contingencies include:
- Home inspection
- Buyer financing
- Selling an existing home
In a hot market, buyers are more likely to waive contingencies to sweeten the deal. If there’s not much competition, you are more likely to encounter buyers with more contingencies.
Know what a strong offer looks like
An experienced real estate agent will be able to help you wade through the offers you receive and help you pinpoint the best ones based on your priorities and other factors. Three factors set a strong offer apart from others: flexibility, financial strength, and earnest money deposits.
Flexibility – If you are still working on purchasing your next home, having buyers with some flexibility is crucial. You may need a little more time to secure your next home.
On the other hand, if you need to move quickly, finding a buyer that can shorten the time to the closing date may be ideal.
Financial strength – This is perhaps the most important feature of a strong offer. You’ll be able to know if a buyer is in an excellent position to purchase your home if they are pre-approved for a mortgage, have a bigger down payment, or even make an all-cash offer.
Concessions – A buyer willing to make concessions is typically serious about purchasing your home. They know what they want and are willing to concede on inspections or other aspects of the deal.
Verify buyer funding
An offer from a pre-approved buyer should always hold more weight than one from a buyer who hasn’t secured funding yet. If something seems shaky, your agent can ask for a letter of qualification from the lender or ask for permission to directly call the lender.
With a cash offer, verifying funding is even more critical. It’s a good idea to require a proof of funds letter from the buyer’s bank. Some buyers use cash offers to offer less on your home because they remove contingencies, which is often a faster sale. You’ll want to determine if faster is more important than a higher offer.
Review closing periods
Your situation will determine which type of closing period is more attractive. If you aren’t quite ready to move, finding a buyer who can give you more time will be the more appealing offer. On the other hand, if you are prepared to move soon, finding a buyer in a similar situation will provide you with the best option.
There’s a lot more to accepting the right offer than merely looking at the price tag. As you assess your situation and priorities, you’ll be better prepared to look at each offer as the business negotiation it is. Working with an experienced Realtor makes the whole process less stressful as well.
If you are ready to sell your home or have questions about choosing between multiple offers, we are happy to help. Give us a call at 801.210.0819.