What’s the best way to start choosing between multiple offers on your house?

Multiple Offers? Which one should you choose?

What’s the best way to start choosing between multiple offers on your house?

Did you know that just because you received an offer, $20,000 over your asking price that that doesn’t necessarily mean that it’s a better offer than the one that was only $10,000 over your asking price?

According to Nerdwallet.com, you’ll need to evaluate each offer fairly and consider the advice from your real estate agent to choose the right offer for your home. Here are strategies to help you reach a decisions

Believe me, I want you to pocket the most amount of money for your house too so I understand why you’d be confused here. I help sellers choose offers for very specific reasons and sometimes, the offers they choose didn’t have the highest price!

1. What kind of financing is the offer? Will the loan close?

2. Is the buyer asking for an inspection contingency and if so, how long?

3. Do you need to rent back your home to give you more time to move out?

Start with price but don’t end there

The offer with the highest price is going to get your attention, especially if it’s close to or above your asking price. But that doesn’t mean you should automatically hand over the keys to the highest bidder. Those offering the most money might be stretching their finances and run into trouble at the closing table. For example, they may not get approved for a big enough mortgage to buy the house at the agreed price.

So in addition to considering the dollar amount, you should review the terms of the entire contract with your real estate agent. For instance, consider how much cash the buyer is planning to include in the offer. More cash — and a correspondingly lower home loan — can ease a closing.

1. What kind of financing is the offer? Will the loan close?

2. Is the buyer asking for an inspection contingency and if so, how long?

3. Do you need to rent back your home to give you more time to move out?

Compare contingencies

When buyers make an offer, they’ll often include a few conditions that, if not met, allow them to cancel the deal. These contingencies may include getting approved for a mortgage, having the home pass an inspection, and making sure the home appraises for a certain amount.

When you’re selling your home, contracts with fewer contingencies are better, because there will be fewer chances for the buyer to back out of the contract.

Consider buyer funding

If the buyer plans to pay in cash, you won’t have to wait for a lender to approve the home loan.

But most of the time, a buyer will need a mortgage, and if that’s the case, consider whether the buyer is preapproved for the home loan. An offer from a preapproved buyer usually is stronger than an offer from a buyer who hasn’t made any financing arrangements.

Consider your home’s value

Say you accept an offer from a buyer who then orders an appraisal of the property. If the appraised market value is less than the offer price, the mortgage company may lower the amount it’s willing to lend the buyer.

But if an offer indicates the buyer is willing to spend his own money to honor the original purchase price, even if the appraisal is unexpectedly low, that offer may be more attractive than one from a buyer who’s more dependent on a loan.

Review closing periods

A buyer who’s willing to close within weeks is more attractive than one who needs or wants months to do the deal. If you’re reviewing similar offers and want to move soon, a quicker close can be a deciding factor.

But if you’re not ready to move, you may be better off with a buyer who’s willing to wait for you to find another home.

Review buyer ‘extras’

Some buyers may offer to pay some of your closing costs as a way to stand out against other offers. Another may make an offer with an escalation clause, offering to outbid another bidder by a certain amount. If you’re considering several offers that have similar price and contingency terms, these kinds of sweeteners can tip the balance.

Getting multiple offers when you sell your home can be exciting. But by considering all parts of the offers, including price, contingencies and ability to close, you can successfully handle multiple offers on your house and sign the best contract.

There are so many things to think about when you receive multiple offers on your home! Make sure you have the right team guiding you along the way.

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Tristen Campanella is a San Diego Real Estate team leader & licensed Real Estate Agent at eXp Realty:

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🏆 Helped hundreds of clients buy and sell homes successfully in San Diego Count

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