It is a seller’s dream situation: you put your house on the market and receive multiple offers. While you might think the highest priced offer is naturally the best, that is not always the case. Learn how to evaluate real estate offers from home buyers so you can accept the offer that makes the most sense for your unique situation.
Set Aside Your Emotions
Selling a home is an emotional time. You may be looking forward to your next steps or feeling nostalgia for the home you have chosen to leave. Emotions will not help you when evaluating whether real estate offers are fair. Allow yourself to feel your emotions, then set them aside so you can be an impartial judge of the offers you have received for your home.
Compare the Price With Recent Offers
While every home is different, your home should not go for significantly more (or significantly less) than other homes in the neighborhood unless the condition is much finer (or much worse) than similar homes. Look at the real estate data to understand pricing trends within your neighborhood. Recently sold home prices can adjust your expectations by allowing you to see the offer in context to recent deals.
Check for Pre-Approved Status
Mortgage lenders may pre-qualify or pre-approve applicants. These sound similar, but there is an important difference to know. A home buyer who is pre-approved has approval from the lender to obtain a loan in a certain amount. A buyer who is pre-qualified is qualified for a loan of a certain amount but is not yet approved. Accordingly, if you choose a pre-approved applicant, the deal can proceed faster than if you choose someone who is only pre-qualified. If you need to sell a home quickly, this factor can make all the difference.
Check the Closing Date
If you want to sell a house quickly, focus on the closing date in the offer. Sometimes, homes close quickly. Other times, the deal can drag out, for example if the buyer is not pre-approved or if they are insisting on a home inspection. When time is critical, you may be better off accepting a lower-priced offer with an early closing date rather than delaying your move (and racking up expenses) while waiting for a far-off date.
Read the Fine Print
Home offers sometimes come with conditions. Read the terms of every offer. Your real estate agent can help you understand the considerations and what they mean for your real estate deal. Some home buyers will offer to cover the seller’s out of pocket costs, such as the closing costs or legal fees. Some home buyers will waive their right to a home inspection, essentially offering to buy the property regardless of condition. By understanding what a buyer may be giving up out of their eagerness to purchase the home, you can compare offers to one another with a better understanding of their impact on you. A buyer who pays the seller’s closing costs will save you money. A buyer who waives an inspection means that you will not be paying for last-minute repairs that a home inspection could have revealed.
Then there are the buyers who ask for concessions from you, the seller. A buyer might request that you cover their closing costs, or they might request that you pay a certain percentage of the home cost. A seller concession of five percent would require you to pay five percent of the home sale price. This would decrease the out-of-pocket costs for the home buyer.
When there are multiple offers, the one with zero seller concessions is often, but not always, the best offer. By taking the time to review the fine print, you will understand the true terms and conditions of each offer and be able to make an informed decision.
Your real estate agent is your ally throughout the selling process. Make sure you choose a local real estate agent you can trust to explain all the terms of each real estate offer. This way, you will be able to weigh the pros and cons of different offers and make the best decision.