Multiple offers: How do I know which offer is the best offer?
You’ve listed, staged, and shown your house, and the offers start to pour in. This is the moment you’ve been working towards, but you’re not finished yet.
How do you know which offer to accept, especially if you receive multiple?
Choosing the best offer on your home is much more complex than choosing the highest bidder. Many factors come into play, and it’s always important to read the fine print in a potential contract. Here are a few things to consider:
Consider Contingencies
The majority of buyers will include some contingencies in their offer. These are things that must happen for the deal to go through. Common contingencies are inspection, financing, and appraisal.
Inspection contingencies allow the buyer to back out in the event a home inspection finds too many major issues with the home. Financing contingencies free the buyer if they are unable to secure a mortgage, and appraisal contingencies allow a buyer to back out if the home is found to be worth less than the offer amount.
These above contingencies are common and often cannot be avoided. Always review contingencies with your real estate agent.
Cash Offers
A cash offer, even if it is not the highest offer, is often a strong contender. After verifying proof of funds, consider the pros and cons of the offer like you would any other. Keep in mind that cash offers are often a good choice because they are less risky than an offer contingent on a buyer securing a mortgage. This means that they are more likely to close and can often do so quickly.
Deposits
A buyer’s earnest money deposit is a sign of their seriousness about buying your home. The higher the deposit, the more difficult for a buyer to walk away from the deal. If you have two offers similar in amount, the one with a higher deposit may be the wiser choice.
Consider Early Offers
In an active market, it can feel strange to accept the first offer that you receive. While it may be tempting to wait while to see what other offers come in, this is not always the best course of action. Just because an offer comes in early does not mean it is not the right choice. Consider all offers fairly, weighing the pros and cons of your first offer as carefully as your fourth. Just because a buyer finds your home quickly does not mean that they are not serious about purchasing it.
Recognize a Quality Buyer
A good offer starts with a good buyer. A few things to consider are the buyer’s financial stability, concessions, and flexibility. Always look for a letter of qualification from the buyer’s lender to ensure their finances are in order. Seriously consider any buyer willing to waive an inspection, as it can save headaches down the road. Finally, look for a buyer that is willing to be flexible when it comes to things like move-in date, especially if you have yet to secure a new home.
Bottom Line:
Knowing what to look for in an offer makes the process of selling a bit easier. Consider every offer fairly, look beyond the offer amount, and read the fine print on all contracts to ensure that you choose the best offer on your home.
Questions? Contact us anytime.