Sunday, March 24, 2019 / by Jody Lee
You want to sell your home for the highest price someone is willing to pay. When evaluating an offer to buy your home, there’s a lot more than the price to consider. Whether you’re the lucky seller with multiple competing offers to buy your house or you’ve just gotten your first nibble from a prospective buyer, you have a lot to think about.
Your agent will help you in this decision process and explain fully each offers pros and cons and make sure you see the difference in each offer. If you only have one offer in hand and it’s a little lower than you had hoped, don’t reject it! You can always counter and see if you can negotiate a better offer.
Remember, every day that your home remains on the market, it loses a little bit of its shine. If you reject your first offer you could find yourself pining for it a couple of weeks later when no one else has stepped up.
Look beyond price. Is the buyer pre-approved for a mortgage? Are they paying all their own closing costs? Are they willing to forgo a home inspection contingency? Are they putting up a reasonable amount of earnest money? Each of these things has value that you have to add to the calculation when looking at the offer.
A bidding war on your home? That’s the dream of any seller. But weighing competitive offers is stressful because most often each has its own quirks and potential pitfalls. At this point, you’re looking to avoid anything that could kill the deal down the road.
Sellers should focus on buyers who have been pre-approved for a loan. Pre-approved means the buyer has met lender criteria for getting a mortgage. As a seller, you only want to deal with buyers who are pre-approved. (And if you’re planning to buy your next home, you should start your own pre-approval process sooner rather than later.) Should you get a cash buyer your agent will make sure they can document that the cash is available.
Contingencies are like the buyer’s version of a “Get out of jail free” card. They give buyers a way out of the deal if they change their minds or something unforeseen comes up. So as a seller, you want as few as possible. Some are avoidable, but others may not be.
The first avoidable contingency is one that says the buyer will purchase your home if and when they sell their existing home. Sometimes this can take a little longer.
The next is an inspection contingency. This basically says the buyer has a set amount of time to inspect the home and ask you to repair any deficiencies they find or walk away from buying your home.
The financing contingency. The buyer will need to fulfill requirements to their lender to be approved to buy your home, should anything happen that jeopardizes this they could walk due to finances.
The importance of being earnest
How much earnest money is the buyer willing to put down? Although it won’t change your bottom-line profit, the larger the earnest money deposit, the more likely that the buyer is serious. You want a buyer who is invested in seeing the deal through. Someone putting down a minimal amount of earnest money may be willing to walk away and leave the meager deposit behind, knowing that you probably won’t spend the time or money to sue them for breach of contract.
Often, buyers will ask sellers to pay some or all of their closing costs. Be sure you consider these costs when evaluating any offer.
P.S. We love your house!
It’s common for buyers to write you a heartfelt letter about why they want to buy your home. And chances are, you feel pretty emotional about it. If all the other conditions of the offer work for you — price, financial ability to close the deal, timing and contingencies — go ahead and let them tug on your heartstrings. You want to feel good about selling your home.
If your thinking of selling your home, let me know I would be happy to help!
Haven Real Estate Group