The current sales market is strong for sellers because there is more demand than supply. If you are considering selling in the next few months, there is a good chance you will have more than one offer. Especially if you prepared the property for sale, staged it well and at the correct asking price with the help of your Real Estate agent.
Your agent should make it known to all buyers agents and buyers that there will be a date/time that all offers will be reviewed and responded to. If you have more than one offer, look at all aspects of each offer. Each offer should be presented with a commitment letter from a lender and a check. Look at each part of the offer, not just the offering price.
Check the timing of the closing. This may be too soon for you to close if you need to find a new home to purchase. Check the contingencies, both financial and inspection-are they reasonable or waved? How much is the down payment? This is important because if it’s only five or ten percent, will the bank change their mind on the loan? Of course, what is the highest offered price. Then a good agent will go back to the ones who offered and request a final and best price/terms. When this happens the final price often goes above the asking price. This does not mean the house is underpriced or that the agent listed it too low. What this means is that for reasons above and beyond reasonable market price, this buyer is willing to spend more for the property. Maybe it’s an investor who owns the adjacent property or a buyer with parents close by to help take care of the kids, you never know.
An example of an offer winning but not being the highest offered price might be a cash offer without inspection or mortgage contingencies. I would recommend that a cash offer be accepted over one that was $10,000 higher with inspection and financial contingencies seven days a week and twice on Sunday. This is because the risk of the deal falling through due to some defect or issue from the inspection or if the asking price is well above asking, the lender may require more down from the buyer if the house does not appraise to the agreed selling price. Take the cash!
Thanks for reading!
Michael Spurr, CBR, SRS, Realtor