By Kyle Hannegan
In today’s competitive market with such low inventory and high demand from buyers, many sellers are receiving multiple offers on their home. But if you’re a seller, which offer should you choose? While you may think the obvious answer is to go with the highest offer, it is actually more complicated than that. Here are some tips to help you navigate any multiple-offer situation:
- Timing is everything. When listing your home in a low inventory market, give buyers a specific response time frame so they’ll know when you’re reviewing the offers. If your home is going live on the market Wednesday morning, you may want to say something like: “Your offer will be reviewed by Thursday at 12 p.m.” This ensures you that you make the most of a 24-hour time period and get as many approved buyers to view your home as possible before having to make a decision.
- Your agent is there to help. Once you receive multiple offers, it is in your best interest to have your agent reach out to everyone who submitted an offer, agents who have viewed your home and agents who still plan to view your home, to let them know this is a multiple offer situation and a best and final offer needs to be turned in at a specified time. This allows you the flexibility to entertain more quality offers without having to reject or eliminate any current offers on the table.
- Highest isn’t always best. While price is a huge contributing factor when deciding between offers, there are many other aspects to keep in mind as well. Consider this:
- Make sure the price is realistic. It is common to see homes sell above list price but consult with your real estate agent to make sure this price aligns with what the home will appraise for. Nothing is worse than when a home doesn’t appraise for contract price!
- Think about contingencies. Is this home contingent upon the sale or close of the buyer’s home? Keep in mind that if you accept an offer with this contingency and the buyer’s home does not close by the said date, the buyer has the right to get out of the contract and you are back to square one.
- Ask about lenders. Who is the lender the buyer is using and what type of financing will he/she get? Certain types of financing have more restrictions, lower credit scores allowed, higher debt-to-income ratios allowed, and require less of a down payment. Always make sure the buyer is using a reputable lender that issues a clean pre-approval letter and that you understand the difference between the types of financing on all the offers presented to you.
- Keep things convenient for you. Does the closing time requested by the buyers align with your next home purchase or move? It’s very important to have all of your affairs in order with your next move aligned with the purchase offer you accept to keep the deal moving toward closing.
Bottom line: Remember all offers aren’t created equal. Be informed, prepared and decisive when listing your home in a seller’s market. Hire a quality real estate agent who can help you decipher between multiple offers to make the best decision. Remember, the highest offer isn’t always the best one for you.
KYLE HANNEGAN is an agent with Berkshire Hathaway HomeServices Select Properties in St. Louis. He is also a member of the national REthink Council. You can visit his website at www.KyleHannegan.com.