Multiple Offers? Here's How To Choose The Right One

In today's hot real estate market, it's not uncommon to receive multiple offers shortly after listing your home for sale. Since getting top dollar is a common goal when selling your home, you may feel tempted to jump on the offer with the highest price. However, doing so could be a mistake. Before you accept an offer, consider these seven other important factors.

1. Cash Offer
   An all-cash offer usually tends to be lower than other offers, but it's often the safest option. When the buyer doesn't have to worry about getting bank approval, there's far less of a chance that the deal will fall through. If selling your home quickly is a priority, this may be your best bet.
   
   
2. Buyer Pre-Approval
   If your potential buyer isn't paying cash, you'll want to see a pre-approval letter from the buyer's lender. Accepting an offer from a pre-approved buyer is much safer than taking your chances on one without it. You must also understand that pre-qualification is not the same as pre-approval. A buyer who has only been pre-qualified still may not receive loan approval once they go through the full underwriting process.

3. Contingencies
   When you receive an offer, there's a good chance there will be a list of things that need to happen before the final deal can go through. These are known as contingencies and often include things like inspections, appraisals, and financing approval. As a seller, you'll want to consider the offer with the fewest contingencies and the shortest amount of time you'll have to wait until you're fully under contract.
   
   
4. Loan Type
   The type of loan your potential buyer is using also makes a difference. Conventional mortgages are fairly simple to obtain. However, if the buyer is using an FHA, VA, or other government-back loans, there is a greater chance for delays. With these types of loans, it's common for the lender to require additional approvals and repairs before final loan approval.
     
5. Seller Expenses
   Carefully review each offer for seller costs, which will lower your final profit. This includes items like seller-paid closing costs and requested repairs. If a buyer is requesting that you include appliances like the washer and dryer, factor in the value of these items when determining the total value of the offer.
   
   
6. Closing Timeline
   How soon the buyer wants to close can also have a big impact on deciding which offer is right for you. If you're building a new home or need to delay moving for some other reason, then an extended closing timeline may save you the hassle and expense of having to move twice. If you've already purchased a new home and are paying two mortgages, then you might want to choose the offer that will close the soonest.
   
   
7. Earnest Money
   When submitting a purchase offer, buyers must make an initial deposit, called earnest money. This typically ranges between one and three percent of the purchase price. If the buyer gets cold feet after the contract is executed, the seller is usually allowed to keep the earnest money. When comparing two similar offers, the one with more earnest money offers you more security.

Working with a qualified real estate agent when selling your home will give you the peace of mind you need to make good decisions.

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