Congratulations, you’ve received multiple offers on your home! This can be exciting and overwhelming all at the same time – it means that people love the house you’ve called home over the past years, but it also means that you now have an important decision to make.
There are several options for Sellers when receiving multiple offers:
- Choose to accept the strongest offer that was initially presented,
- Counter one of the offers received,
- Request highest and best from all potential buyers, then proceed with either of the first two options.
When you’re trying to decide which offer is best for you and your situation, what should you be looking for?
Purchase Price and Seller Concessions
If the Buyer has offered above your list price, will your home appraise for the amount that the Buyer is offering?
If the Buyer is requesting Seller Concessions (for you to pay a portion of their closing costs or for a home warranty), how does the request affect your net profit? Depending on how they adjust their offer price and concessions, your net profit may stay around the same amount.
How does the closing date requested by the Buyer align with your schedule? Is it too soon, or do they need too much time? You may decide to choose a lower offer because of a sooner closing date, or because they have provided you more time to pack and move.
If the Buyer requests a sooner closing date and you need more time, would they consider signing a Post-Closing Occupancy Agreement for you to rent back the home for another month (give or take) while you finalize the purchase of your next home or find another place to live?
Type of Contract: As-Is or Standard
A standard purchase and sale contract allows for pre-negotiated limits for repair expenses in case issues are found during a home inspection. An as-is contract indicates that the home will be sold as it currently stands; however, it is important to note that if a Buyer has made an offer on an as-is contract they have the right to cancel during the inspection period and this sometimes may result in negotiations for repairs or concessions to satisfy the Buyer.
Purchase Method: Cash vs Financing
When reviewing an offer that is contingent upon the Buyer obtaining financing, take notice of whether or not the Buyer has been pre-qualified or pre-approved. What kind of information have they provided to their lender? A pre-approved Buyer is one step closer to obtaining a mortgage than a pre-qualified Buyer because they have submitted important financial documents to the lender for verification, and the lender should have checked the Buyer’s credit.
If a cash offer is presented, it eliminates the need for the Buyer to obtain financing. Just be sure that the Buyer provides you with appropriate proof of funds (a bank letter or bank statement dated within the last 30 days that shows they have the funds to close).
Personal Property Requests
Has the Buyer requested for you to items to be included in the sale of the home that you were not planning to leave? Are they requesting these items while also offering a higher price, or a lower price? Are you willing to part with these items?
Inspection Period – can inspections be done quicker than the Buyer is requesting?
Appraisal contingency – is the timeframe realistic and in your favor so that you’re not losing valuable marketing time if the buyer should back out?
Contingent upon the sale of Buyer’s home – is the Buyer’s home currently under contract and is the contract solid? How does their contract affect your closing date?
Remember that you don’t have to go through the process on your own. Your Realtor is your number one resource for advice and suggestions!