One of the best questions to ask prior to listing is “what do I want out of this transaction?” Often times how you answer will determine the best offer for you. There are a number of factors to consider when selling your home. All sellers are motivated in some capacity by price. However there are different ways to maximize your return. An outstanding offer that doesn’t close does much more harm than good. Not only have you wasted weeks of your time but you may have lost real buyers that were interested. Choosing between offers is a great problem to have but you still need to choose wisely. Here are a few tips for how to pick the best offer.
1. Ease of transaction. With any offer you accept you want to be assured that it will actually close. While you can never account for the unexpected there are some clues you can follow. The most important is with the type of financing provided. An all cash offer provides the least resistance but for this there is usually a reduction in price. If there is lender financing you need to look at the terms. Generally speaking the higher the down payment the stronger the loan application is. Find out the specific type of financing and if there are any potential lending issues. If they don’t close it doesn’t matter what amount the offer is for.
2. Timeframe. One of the first things you should look at is the projected closing date. The closer the closing date the less chance that issues will pop up. With an extended closing date there may be other factors to consider. The buyer may have to sell their home to purchase yours. They may need a specific type of financing that could lead to extensions. The average time to close is currently around 45 days. Anything longer than that on the contract could be a major red flag.
3. Contingencies. Asking that certain items be removed or left behind is part of the negotiating process. This is expected and at times welcome to show that the buyer really wants the property. However there comes a time when it can become too difficult to deal with. Typically if this is a pattern before the offer is accepted it will continue to be one right up until the closing. If you are in a multiple offer situation the path of least resistance may be the way to go.
4. Price. You can’t ignore the asking price. On certain transactions there could be thousands of dollars difference in price. While the goal is to close you should never leave money on the table either. Start with the highest offer and look at the contract line by line. If you have concerns let your real estate know so they can address them with the buying agent. Some of these concerns can be easily taken care of. Price should always be a main part in your decision making process.
Choosing between multiple offers is a great position to be in. It is important that you pick the offer that provides a balance between price and the ability to close. Price is always important but there are other critical factors as well.