It is every seller’s dream to be able to sift through multiple offers that pour in. For some sellers in certain markets this may be a reality. Even if you only have a handful of offers to choose from picking the right one makes all the difference. The natural instinct is to blindly choose the highest one without giving the others much thought. The bottom line is always important but if you don’t close you will end up with nothing. Furthermore the other offers that are on the table may never come back. If you are deciding between multiple offers here are a few things to consider.
Look at the whole offer. A good real estate agent will help walk you through the entire contract. It is human nature to simply gravitate to the purchase price but there is much more to a contract than price. You need to look at the whole presentation. Where and how their offer is financed is the first thing you should look at. Are they paying cash or getting a mortgage? If they are getting a mortgage what type of loan are the approved for? The difference between an FHA loan and conventional could make the difference in their approval. Next look at the proposed closing date. A typical offer will have the closing anywhere from 30-45 days. Anything past this could cause a red flag. On the contract look to see if there are any contingencies that could be a problem as the transaction moves forward. There is something to be said for taking the offer with the path of least resistance. The more hurdles to close greater the chance that something may cause problems with the deal down the road.
Responsiveness. If a potential buyer really wants your property they will do everything in their power to get it. This means getting everything back to you as quickly as possible. If you have to wait a few days for something to be signed or a document to be sent over you should question just how vested in the process they are. Dragging their feet in the beginning of the process usually means this will happen the entire deal. If all other things are equal you should choose the offer in which the buyer and their real estate agent respond quickly. This is a sign they want the property and will do their part to get it.
Preapproval strength. If two offers have a similar price look to see who has the strongest preapproval. Most preapproval or prequalification letters are fairly generic in nature. Your real estate agent can reach out to the lender to get an idea of how strong their application is. They won’t tell you specifics on income and credit but they can get an idea if they borrower is solid. Closing a mortgage is still a tedious and sometimes difficult task. All it takes is one or two things to ruin an otherwise strong deal. One of the worst things you can do is accept an offer that needs multiple extensions and doesn’t end up closing. This leaves you at square one 60 days later looking for a qualified buyer. A strong borrower with a lower offer may be more valuable than the alternative.
Price is always a consideration with every sale. While it is important there are times when it may not be the most important thing. Choosing the best offer is often better than choosing the one with the highest price.