The answer to the title of this article is easy, right? The offer with the most money. If you get multiple offers over the asking price with one that is thousands over the asking price you take the that one assuming that the terms are to your liking. That word “terms” may be the rub though. Taking the offer with the best price may not be the best offer for you. There are other terms and contingencies to consider.
Sellers should also look at the following factors before saying yes to any offer:
Contingencies: There are a number of contingencies that are put into a typical offer to purchase. The buyer may make the sale contingent on the sale of their house, or on a home inspection, or an appraisal or on their ability to get financing. Sellers should review all of these contingencies and requirements to see if there is anything out of the ordinary that would jeopardize a sale.
You may have a buyer who makes an offer at or above the asking price “subject to the sale of their home”. As a REALTOR®, reviewing this with my seller I want to know where is this buyer with the sale of their home? Is it on the market? Is it under agreement? If it is under agreement where is it in the sale process? Has their buyer done a home inspection or received financing approval already?
Ideally a buyer will waive all these contingencies but no seller should expect that. Review and evaluate all contingencies and lean on your REALTOR® to have him or her tell you what is out of the ordinary.
Financing: It doesn’t matter how much an offer is if a buyer can’t get the money to pay the price. Depending on the financial institution offers made contingent on financing can be slow to close. Obviously a cash offer would be much more appealing than any offer with a financing contingency. How much more appealing though? Is the market so hot that getting a positive appraisal is an issue? It was a problem in some transactions back in the last sellers’ market although I haven’t run into that issue in this one.
Willingness: The ability and willingness of the buyer to work with you is important when considering their offer. Maybe your closing date is very important as you need to close quick to get into the home you want to purchase. Maybe you need a longer closing to give you time to find the next home.
Not all real estate sales are about dollars and cents. Get a feel from your REALTOR® on your buyer. What is their situation? Is there home selling soon and they need a place to go? Are they being transferred? Are they willing to work with you going forward?
Knowing whether or not to take an initial offer that may not look ideal can have long term consequences. Are you going to wish 6 months from now that you took that “low ball” offer? Should you have rejected it and held out for more money? Lean on your REALTOR® to see what he/she thinks. If they believe that you should take the offer have them show you why with comparable sales that back up what they are saying. If your REALTOR® thinks you should wait for something better to come along weigh that advice with the knowledge that it could take some time. The decision is in your hands; use the knowledge from all the shows, articles and most of all the local real estate market and your REALTOR® to help make the most informed decision.
If you have any questions about this article, real estate in general or are looking to buy or sell a home please contact me, John McCarthy at Rowley Realty, 165 Main St., Rowley, MA 01969, Phone: 978 948-2758, Cell 978 835-2573 or via email at firstname.lastname@example.org