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If you’re selling your house and get multiple offers, you’re in a great position. Read on for a few considerations to determine which one to take.
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While the housing market has cooled slightly, it’s still a seller’s market in many parts of the United States — in part because there are so few people listing their properties, so there is limited inventory.
With the market favoring the seller, it is entirely possible that you will get multiple offers after listing your home for sale. If that happens to you, here’s how to decide between the different offers you receive.
Price is the first consideration — but not the only one
The first factor to consider is obviously the price that the buyer is willing to pay for the home. You want to get the most money possible from people who are buying a house so you can earn a generous profit.
But you don’t just want to look at the price. You also want to look at:
Whether the buyer needs financing: If the buyer is working with a mortgage lender to buy your home, this complicates the process. They’ll need a home appraisal, and if it comes in too low, they may not be able to follow through with the sale. Or they could end up with the financing falling through and being unable to buy. When possible, it’s often best to look for a cash buyer.What contingencies the buyer has put into place: Buyers usually make an offer contingent on an inspection, an appraisal, and getting approved for a loan. When an offer is contingent on something, that condition has to be met first. The more contingencies a buyer has, the more chances there are of the sale falling through. If a buyer makes an offer contingent on their own home selling, this can be a huge red flag, as you’d have to hope they can find a buyer before you can close your sale.The earnest money deposit: Buyers have to put earnest money into escrow, a special account with the title company. This deposit protects you, as the buyer can’t just walk away from the sale for no reason without losing their deposit. Ideally, you’d want someone to make a larger deposit.The closing schedule: You’ll want a buyer who is willing to close at a time that’s convenient for you. If a buyer wants to close in two months but you want to move in a month, that’s a huge problem.
Ultimately, if you can find a cash buyer offering few contingencies — especially if they waive the inspection contingency so they can’t renegotiate the deal if the inspector finds issues — then you may want to accept that offer even if it is for a slightly lower price. That’s because doing so could simplify the transaction and maximize the chances of the sale going through in the end.
On the other hand, any offers contingent on a home selling, or any offers that come in without a mortgage pre-approval letter showing the buyer is likely to get financing, should likely be overlooked for a more qualified buyer.
Considering the contingencies can help ensure your home sale closes at the right price
You need to sell your house for enough to pay off your mortgage and ideally make a profit, so paying attention to price matters. But looking at the big picture can help you find the buyer in the best position to close the deal — and who is least likely to cause problems throughout the process. By taking all of these things into consideration, you can find the buyer who is right for you.
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