Tuesday, December 31, 2024 / by Teresa Pileggi
Multiple Offers On Your Listing
Multiple Offers On Your Listing: Here Is How To Select The Best
Every seller dreams of getting multiple offers.
High traffic could indicate that you have set an attractive price, your house has desirable features, or it is located in a good neighborhood. However, with the influx of offers comes the challenge of picking the right one that fits your selling priorities or financial needs. Choosing the best offers is sometimes more than considering the highest bid. You must also analyze the offers based on their risks and overall selling costs. Here is a breakdown of essential factors to consider when choosing the best offer.
1. Understand The Offer's Components
A purchase offer has several components that influence the sale speed and strength. While the price
might be the right thing that catches your attention, it is essential to go beyond the amount and look at other aspects affecting the selling process.
Some of the offer's components that can influence your choice include:
? Contingencies: Contingencies are clauses that allow the buyer to cancel the contract if you do not meet specific conditions. The more contingencies, the more likely the deal is to fall through. Typical contingencies include inspection, appraisal, and financing contingencies.
? Deposit and earnest money: A higher deposit indicates the buyer is
serious about the deal and ready to move to the closing table. They also indicate the buyer's financial stability, essential in ensuring the sale proceeds without financing issues.
? Closing date: A buyer's proposed closing date determines whether the sale will close faster. A shorter timeline works better if you have limited time and need to relocate or move to your new home. Conversely, a flexible or extended closing date allows you to plan yourself
before moving out.
2. Consider Buyer's Financing Options
The buyer's financing method, including the closing date and costs, can impact the sale. While most buyers use loans to finance their purchases, it is also crucial to remember that not all loans will favor you as a seller.
Therefore, when assessing offers based on financing options, here are the top things to consider:
? Cash offers: Cash offers are tempting since they shorten the process by eliminating the need to deal with lender approval and mortgages. However, you may need to verify if the buyer has enough liquid cash to finance their purchase to ensure timely closing. You should also look at their demands, as they can impact your actual selling price.
? Mortgage-financed purchases: Consider the buyer's loan type and financial standing. Buyers with conventional loans are less risky than those with government-backed loans. Conventional loans have fewer property standards, and buyers must meet the set down payment requirements before they qualify.
? Buyer's pre-approval versus pre-qualification: A pre-approved buyer has been rigorously vetted by a lender and has verified credit score, income, and assets. Unlike pre-qualified buyers, who undergo less rigorous vetting, this makes their offer more secure.
3. Involve Your Real Estate Agent
A real estate agent is essential in most property selling steps, and choosing the best offer is not exceptional. Since the buyer has their agent to advise and negotiate the offer on their behalf, it is vital that you also have your representative. A seller's agent will help you evaluate the offers and handle other complex aspects such as:
? Identifying red flags in tempting offers, such as unrealistic demands or unqualified buyers.
? Negotiate with the buyer or their agents to improve the purchase terms by reducing contingencies or increasing deposits.
? Comparing similar offers and picking one that aligns with your priorities.
? Talk to the buyer's sales representatives to ensure the sale flows at your pace.
? Research the buyer's agent to understand their weak points and negotiating powers.
4. Always Have Backup Offer
Choosing the best offer does not mean it will close according to your terms. Even after accepting the offer and entering into a contract with the buyer, having a backup offer is recommended. This ensures you are not starting from scratch to vet offers if the buyer cancels the current agreement. It also gives you negotiating power, letting the first buyer know you can easily take another offer, mainly if they include unrealistic demands in the negotiation phase. However, always make sure other qualified buyers realize they will be considered as backups to keep their offers open.
The Bottom Line
Receiving multiple offers on your listing is a desirable but complex situation. Having more buyers interested in your property can give you more negotiating power as a seller and allow you to focus only on offers that align with your financial needs. However, picking suitable offers requires looking beyond the numbers and considering other factors impacting your preferences or unique circumstances. Therefore, when deciding which offer to take, involving your real estate agent is
invaluable as they will help you choose an offer with fewer risks and more profit potential.
Every seller dreams of getting multiple offers.
High traffic could indicate that you have set an attractive price, your house has desirable features, or it is located in a good neighborhood. However, with the influx of offers comes the challenge of picking the right one that fits your selling priorities or financial needs. Choosing the best offers is sometimes more than considering the highest bid. You must also analyze the offers based on their risks and overall selling costs. Here is a breakdown of essential factors to consider when choosing the best offer.
1. Understand The Offer's Components
A purchase offer has several components that influence the sale speed and strength. While the price
might be the right thing that catches your attention, it is essential to go beyond the amount and look at other aspects affecting the selling process.
Some of the offer's components that can influence your choice include:
? Contingencies: Contingencies are clauses that allow the buyer to cancel the contract if you do not meet specific conditions. The more contingencies, the more likely the deal is to fall through. Typical contingencies include inspection, appraisal, and financing contingencies.
? Deposit and earnest money: A higher deposit indicates the buyer is
serious about the deal and ready to move to the closing table. They also indicate the buyer's financial stability, essential in ensuring the sale proceeds without financing issues.
? Closing date: A buyer's proposed closing date determines whether the sale will close faster. A shorter timeline works better if you have limited time and need to relocate or move to your new home. Conversely, a flexible or extended closing date allows you to plan yourself
before moving out.
2. Consider Buyer's Financing Options
The buyer's financing method, including the closing date and costs, can impact the sale. While most buyers use loans to finance their purchases, it is also crucial to remember that not all loans will favor you as a seller.
Therefore, when assessing offers based on financing options, here are the top things to consider:
? Cash offers: Cash offers are tempting since they shorten the process by eliminating the need to deal with lender approval and mortgages. However, you may need to verify if the buyer has enough liquid cash to finance their purchase to ensure timely closing. You should also look at their demands, as they can impact your actual selling price.
? Mortgage-financed purchases: Consider the buyer's loan type and financial standing. Buyers with conventional loans are less risky than those with government-backed loans. Conventional loans have fewer property standards, and buyers must meet the set down payment requirements before they qualify.
? Buyer's pre-approval versus pre-qualification: A pre-approved buyer has been rigorously vetted by a lender and has verified credit score, income, and assets. Unlike pre-qualified buyers, who undergo less rigorous vetting, this makes their offer more secure.
3. Involve Your Real Estate Agent
A real estate agent is essential in most property selling steps, and choosing the best offer is not exceptional. Since the buyer has their agent to advise and negotiate the offer on their behalf, it is vital that you also have your representative. A seller's agent will help you evaluate the offers and handle other complex aspects such as:
? Identifying red flags in tempting offers, such as unrealistic demands or unqualified buyers.
? Negotiate with the buyer or their agents to improve the purchase terms by reducing contingencies or increasing deposits.
? Comparing similar offers and picking one that aligns with your priorities.
? Talk to the buyer's sales representatives to ensure the sale flows at your pace.
? Research the buyer's agent to understand their weak points and negotiating powers.
4. Always Have Backup Offer
Choosing the best offer does not mean it will close according to your terms. Even after accepting the offer and entering into a contract with the buyer, having a backup offer is recommended. This ensures you are not starting from scratch to vet offers if the buyer cancels the current agreement. It also gives you negotiating power, letting the first buyer know you can easily take another offer, mainly if they include unrealistic demands in the negotiation phase. However, always make sure other qualified buyers realize they will be considered as backups to keep their offers open.
The Bottom Line
Receiving multiple offers on your listing is a desirable but complex situation. Having more buyers interested in your property can give you more negotiating power as a seller and allow you to focus only on offers that align with your financial needs. However, picking suitable offers requires looking beyond the numbers and considering other factors impacting your preferences or unique circumstances. Therefore, when deciding which offer to take, involving your real estate agent is
invaluable as they will help you choose an offer with fewer risks and more profit potential.