Learn How Sellers Choose an Offer On Their Homes
Wondering how sellers choose an offer on their home? If you’re a first-time home seller, you may want to know what you should look for when evaluating multiple offers on your home.
While you may think it’s as easy as choosing the offer with the highest price, this isn’t the case. There are many more considerations to make aside from price when looking at home buyers’ offers.
In this post, our real estate team at Your Home Sold Guaranteed Realty – The Nathan Clark Team will discuss seven factors to consider when reviewing offers on your property.
First, Define Your Goals
If you want to know how sellers choose an offer, it starts with having defined goals. You’ll likely go over your goals for the sale with your realtor when you first hire them.
For example, your goal may be to sell your home quickly because you’re moving for a new job. For this reason, you may just take the first offer on the home if it’s fair.
Or, if you’re purchasing a new home and planning to invest in it, your goal may be to make the most amount of money possible. This means you may want to consider many potential offers to find the best one.
Of course, an experienced realtor can help you meet all of your goals– including selling your home fast and for top dollar simultaneously.
How Sellers Choose an Offer – 7 Things To Look For
1. Offer Price
Many first-time home sellers are tempted to choose the home buyer with the highest offer. While it isn’t quite as simple as that, the offer price certainly does play a huge role in whether or not the deal is attractive.
Generally, a higher offer is preferable to a lower offer. But there are other factors that influence how much money you actually end up with in your pocket after the deal closes.
So, take a moment to calculate what your actual net proceeds will be. Subtract costs like the closing fees, any concessions the home buyer has asked for, and potential lender-requested repairs that may result after the appraisal. This will leave you with the true value of the offer.
Of course, your realtor can help you consider all these costs to ensure that you end up with an amount that aligns with your asking price.
2. Type of Payment
Next, it’s important to consider how the home buyer is purchasing your home. Are they making a cash offer? Or do they need financing?
Cash offers [link to cash offer post] are often more attractive to home sellers because it means the sale closes faster. There’s no need to worry about whether the buyer is pre-approved for a mortgage, or if their source of financing will fall through at the last minute.
But this doesn’t necessarily mean cash offers are always the best. It’s important to evaluate them as you would any other offer. Is the home buyer making contingencies? Does the closing timeline align with your needs?
It may turn out that an offer with financing may be a better deal because it comes with fewer contingencies and demands on you as the home seller.
If you do go through with a cash offer, remember to have your realtor ask the home buyer for proof of their funds to verify their ability to purchase.
3. Earnest Money Deposit
Your realtor will take a look at the home buyer’s proposed down payment and earnest money deposit to gauge how serious their intentions are. Buyers willing to make a larger down payment or earnest money deposit are more favorable than others.
Aside from showing they’re serious about buying the home, it also proves they have the financial ability to afford it.
4. Pre-Approval Status
Related to the home buyer’s ability to afford the home is whether or not they’ve been pre-approved for a mortgage.
It’s important to find a buyer with pre-approval because that way, you won’t have to worry about their ability to secure financing down the road, which can possibly delay your closing. And if they find out at the last minute that they can’t get financing at all, it can derail the entire deal.
Aside from the buyer’s pre-approval status, it’s also important to verify who their lender is and what type of mortgage they have. Some lenders have better reputations than others, and certain financing options have different pros and cons for you as the home seller.
For example, a Federal Housing Administration (FHA) home loan comes with certain requirements that you will have to meet in order for the loan to be approved.
A major factor that determines how sellers choose an offer is whether it includes any contingencies or concessions.
Contingencies are certain conditions that must be met before the sale goes through. If they are not met, then the home buyer can potentially pull out of the deal.
For example, the home buyer may make the sale contingent on a certain appraisal amount, the results of the home inspection, or the sale of their own home.
Concessions are certain requests the home buyer may include in their offer. For example, asking you to pay all the closing costs or make a certain repair. They can also include personal property requests, which ask you for appliances or furniture to be included with the home.
If there are too many contingencies or concessions, the offer may not be worth it. Your realtor can help you determine what’s fair.
6. Additional Incentives
It’s also important to take into account any additional incentives the home buyer has included to make their offer stand out from others. For example, helping to pay some of the closing costs or an agreement to outbid other buyers.
Other incentives can include allowing you to stay in the home for a certain period of time, possibly at no additional cost, while you secure your next house. This can be helpful if you already have an offer on another home and are waiting for the deal to close.
7. Closing Timeline
Lastly, it’s essential to consider the home buyer’s closing timeline to see if it aligns with your own. For example, if your goal is to sell fast, then you’ll likely want to ensure you choose a pre-approved buyer to avoid any last-minute financing hang-ups.
Paying attention to closing dates is also important if you’re buying or selling at the same time, so you can plan your transition between both homes.
Our Real Estate Team Can Help You Review Buyer Offers
If you’re wondering how sellers choose an offer, the easiest and most efficient is ultimately by consulting with your realtor. An experienced realtor can help you negotiate and propose counteroffers, so you end up with the best possible deal.
If you’re looking to sell a home in New England, then our real estate team at Your Home Sold Guaranteed Realty – The Nathan Clark Team should be your number one choice.
Our award-winning team has been serving the Rhode Island, Connecticut, and Massachusetts markets for years. During that time, we’ve helped thousands of home sellers sell their properties fast and for top dollar.
On top of that, we stand out from other realtors because of our unique seller’s guarantees. This includes our Guaranteed Home Sale Program, which takes away all the risk of the home selling process, particularly if you’re buying and selling a home at the same time.
To learn more about our guarantees or how sellers choose an offer, give us a call at 401-288-3557 or fill out the form below.