Homeowners who are about to put their homes on the market often dream of receiving lots of attention from qualified buyers, followed by multiple purchase offers. In reality, however, multiple offers on a home — if handled incorrectly — can be like over-indulging in a rich dessert and feeling queasy or ill afterward, instead of being well satisfied. Handling a multiple offer situation correctly, however, can result in locking in the best possible contract price and terms in a hectic real estate market. For those planning to sell their home soon in today’s heated real estate market and anticipating multiple offers, these tips can help ensure that the best possible offer is accepted.
Price is Important but Only Part of the Picture
When buyers want a home and know the competition is stiff, they know that offering a higher purchase price can get the sellers attention. But sometimes, they also use a higher purchase offer to help offset less attractive terms and conditions they need. For example, a buyer who offers a higher purchase price with an extended closing date may not result in more profit to the seller, if it means altering their plans or having to pay several months of additional mortgage interest, insurance, and upkeep payments on the home.
Contingencies Can Make or Break the Deal
Buyer offers with the best purchase price may not end up being a really great deal if there are contingencies that allow them to easily abandon the transaction. Sellers should be particularly wary of offers from buyers who have not yet been fully approved for a mortgage or those that hinge upon the successful closing of another home, as they can result in numerous delays or an unexpected termination of the purchase contract.
Instead, sellers may want to consider opting for a purchase offer where buyers are willing to waive contingencies such as inspections or appraisals. This type of offer may not result in quite as much cash at the closing table for the seller, but it may mean a faster, smoother transaction. For sellers who have to move on rigid timeline, the speed of closing may be more important than the extra cash.
Pay attention to any extra benefits buyers may be offering
In a very heated real estate market like the one currently being experiences in many areas of the country, the best homes sell quickly. Buyers in these markets understand that they need to add something extra to their offer to help grab the seller’s attention and win the bidding war. Sellers who are working with multiple offers should look for these extras and consider them carefully. Some examples of extra benefits buyers may offer when competing with other buyers include:
- An escalation clause that raises their offer, should a higher offer be received
- An offer to pay the seller’s closing or moving expenses
- An offer to allow the seller to remain in the home for a specified time after closing
Relay on an experienced professional
Managing multiple offers correctly can be the difference between taking advantage of the best possible price and terms or finding out too late that the best offer was overlooked or allowed to get away. When buyers make their offers in a competitive sales market where they know they are up against other bidders, they often use short response times in an attempt to narrow the competition. Sellers who have become distracted with several offers can find themselves struggling to respond to these offers, especially if they are considering a counter offer.
Avoiding this type of problem while also making sure that the best possible offer is given full attention is easiest when sellers rely on the negotiating skills of a successful real estate professional with a wealth of experience with multiple offer situations. While the final decision will still be the seller’s responsibility, the real estate agent will be able to help the sellers evaluate each one carefully and look for any specific issues or benefits they may contain. In addition, the agent will understand the process of responding to multiple offers and how to negotiate effectively to maximize each viable offer and do so within tight timelines.