Choosing Between Multiple Offers
If you are a homeseller finding yourself in the (fortunate) position of receiving multiple offers on your home, it’s important to look closely at all of the offers in hand, after taking a moment to celebrate! While price is often the deciding factor in choosing between multiple offers, sellers should always look at all of the terms of each sales contract. Key terms like settlement date and contingencies are just as important (sometimes more so) than price.
LOOK FOR THE BEST & STRONGEST TERMS
While tempting to focus on the amount of each offer, it’s very important to also look at the other terms of the contract in a multiple offer situation.
Does the settlement date align with your plans? Would you need a rent back? If so, do any of the offers include a free rent back?
Can the buyer back out of the contract? You want to look for any contingencies included in each offer and assess how easily a buyer could get out of the contract. Some contingencies are significantly more palatable to sellers than others. You will want to discuss the details of contingencies with your Realtor. You can read about the most common types of contingencies here.
Is the buyer requesting that you pay for a home warranty or pest inspection? While these fees are not substantial, a buyer who is willing to pay for their own inspections and warranty is preferable to one asking you to pay.
AMOUNT OF THE EARNEST MONEY DEPOSIT
The earnest money deposit (EMD) shows the seller that the buyer is “earnest” about buying the house. The higher the EMD, the more serious the buyer. If for some reason the buyer backs out or defaults on the contract, they would lose their earnest money.
CHECK THE BUYERS’ FINANCING
Look at how the buyers are paying for the house and double check it! If it is a cash offer, make sure the buyers have proof of funds in the form of a letter from their bank or a copy of their most recent statement. If the buyers are financing the home, first check that they are pre-approved, with a lender letter. Then look at the type of program and bank they are using. Not all are lenders and loan programs are created equal! Listing agents prefer to work with local lenders whenever possible.
WHO IS THE TITLE COMPANY?
Also, check the title company that the buyer plans to use for closing. Your agent should be able to tell you if it’s a reputable company. Your agent may have a preferred title company with a proven track record that he or she prefers to use.
DON’T GET PERSONAL
Remember, choosing an offer is a business decision, not a personal one. Try not to look at any heartfelt letters or photos buyers may have included in their offers. Look at the contract terms and pick the one that makes the most sense for you financially and logistically.
LISTEN TO YOUR REALTOR
Of course, you will want to heed your Realtor’s advice when choosing between multiple offers. This situation is one of the main reasons you want a trusted and experienced agent on your side. Your Realtor will help you sort through the offers and present you with an “apples-to-apples” comparison and suggest the best course of action.
THE BOTTOM LINE
Choosing between multiple offers is every home sellers dream! Enjoy the moment but take the time to look closely at the terms and conditions of each offer. Your Realtor will guide you through the process and suggest the best course of action.
Thinking of selling you home? Please contact us. In our 25 years of experience, we’ve helped hundreds of home sellers achieve their real estate goals. We’d love to help you too!
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