When hearing the term “multiple offers”, most sellers think one thing and one thing only: more money in the bank. And while multiple offers can often ignite a bidding war that works strongly to a seller’s advantage, they can also come with some tough decision-making. After all, the highest priced offer isn’t always necessarily the best offer. When in doubt, always rely on the advice of a trusted Grand Rapids real estate agent, and ask yourself these 4 questions as you weigh the pros and cons of each offer:
Are there any deal-breaker contingencies?
While many deals include contingencies put forth by the buyer, be sure to evaluate them carefully before moving forward. For instance, if your buyer’s offer is contingent on the sale of their existing home or hinges on a mortgage approval that hasn’t been cleared, there’s a much greater chance of their offer falling through.
Is my buyer pre-approved?
One huge factor to figure out before locking into an offer is whether or not your buyer is pre-approved for a mortgage at the potential purchase price of your home. While pre-approvals can (and do) sometimes fall through, it’s much less risky if you know your buyer has been recently pre-approved up to or above the loan amount necessary to purchase your home.
Do they have any appraisal requirements?
Be aware of any appraisal contingencies your potential buyers have factored in to their offers. After all, if your home doesn’t appraise at or above the purchase price, your buyers’ lender may not be willing to lend the difference and your buyer may be forced to make up for the gap between the purchase price and their approved loan amount, which can sometimes cause the deal to fall through.
What does their closing timeline look like?
While a buyer’s closing timeline may seem less significant than the purchase price they’re offering, it can play a big role in one offer outweighing another. Be sure to understand your buyer’s situation; they may have already sold their existing home and need to be moved into yours within a month, or they may not have listed their current home yet and may be hoping to stretch the timeline a bit further, allowing you to keep possession of your current home for a month or two after closing while they work on selling their existing home. Often, you may want to choose a buyer whose closing timeline aligns with yours, regardless if their offer is a bit lower than others.
Are there any advantages to going with a buyer whose bid isn’t the highest?
While most might think the highest offer is always the best offer, asking yourself the questions above during the decision-making process can help sort out all the nitty-gritty details that go way beyond something as simple as the dollar amount of an offer. Be sure to weigh in all the factors — contingencies, appraisal requirements, closing timeline, and pre-approval — and find the buyer who is the best fit for your situation. If you’re not sure how to determine which buyer is the right fit for you in a multiple offers situation, lean on a trusted and talented RE/MAX of Grand Rapids realtor to guide you to the finish line.