Are you selling your home and reviewing several offers? It’s important to recognize that top dollar shouldn’t be your only consideration.
Here’s everything you need to know about choosing the best one.
Determine your preferred financing method
As a seller, you probably have a number in mind that you would like a buyer to meet or exceed. But it’s important for the buyers to prove they can afford the home.
If the buyers intend to get a mortgage, there should be a pre-approval letter included in an offer on their lender’s letterhead.
Do you need to sell your home fast? Then you may prefer an all-cash offer. This usually involves less risk and a shorter escrow period.
If a potential buyer makes a cash offer, ask for proof of funds before accepting it. This proof comes in the form of a bank or investment account statement.
However, all-cash buyers have negotiation power. And they typically want something in return for bringing the cash. For example, they could offer below the asking price.
Consider the earnest money deposit
The buyer’s earnest money or “good-faith” deposit is a sum of money that a buyer entrusts to prove that they are serious about purchasing the home.
The buyer’s good-faith deposit goes toward the down payment if they close on the home. If the buyers back out of the contract, you could potentially keep this deposit as a consolation.
This deposit is typically worth 1-2% of the sale price of the home. But the higher the deposit, the stronger the offer.
Look for fewer contingencies
Contingencies are benchmarks buyers set that need to be met for the transaction to continue moving forward.
The most popular contingencies are the inspection and appraisal contingency.
The inspection contingency allows the buyer to have the house inspected. If issues appear, they can request to have the issues fixed or back out of the contract.
With an appraisal contingency, a satisfactory appraisal of your property must be conducted. If the appraisal doesn’t match the agreed-upon price, you and the buyer will have to reach a new number before settlement.
Anytime a contingency can’t be satisfied, the buyer has a chance to walk away from the purchase. So, the fewer the chances the buyer can exit the transaction, the better.
Choosing an offer with minimal contingencies is just as important as the sale price.
Choose your ideal closing timeline
Finally, consider your optimal timeline for heading to the settlement table. Moving out isn’t easy, especially if you’ve lived in the home for a while.
Timing is everything. With that in mind, you’re going to want to choose an offer with a closing date that suits your needs.
While a quick closing is desirable to some, others need more time to get their ducks in a row.
So, weigh the cons against the pros before accepting just any offer that looks appealing to the eye. Pick the offer that meets both your wants and your needs.
