What happens when inventory is slim and demand is high? Buyers flock to new listings, packing open houses and rushing to get offers in as sellers set ‘best and highest’ deadlines. When properties are besieged with multiple offers, how do sellers choose a winner? Here are five elements that can help them decide.
If a purchaser is financing, have they provided a recent pre-approval letter? This document provides proof that a buyer has been vetted by their lender, including a verification of assets, income and good credit. If a financed offer is submitted without a pre-approval, it would never be advisable to accept it.
2) DOWN PAYMENT AMOUNT
Larger down payments often equate to less worry for sellers. Why? Buyers who put more down are viewed as having an easier time qualifying for financing. Additionally, purchasers with greater liquidity are usually better equipped to handle unforeseen circumstances that may arise during the transaction, such as issues with the inspection or appraisal. Of course, cash offers make sellers extremely comfortable. With no bank involvement, these buyers close faster and carry less risk than those that are mortgage contingent.
3) EARNEST MONEY AMOUNT
Plain and simple, ‘ya gotta have skin in the game’. Low earnest funds can serve to demonstrate a low level of commitment and an ‘easy way out’. A purchaser’s escrow offering must reflect a strong incentive to follow through with the deal.
4) CLOSING DATE
Every seller’s situation is different. Some need a quick closing. Some desire a leaseback wherein they can stay in their home until they make their next move. Others may want a very specific closing date that extends months out. A buyer with more flexibility has a greater chance of winning a bidding war.
Inspection time – the period that often makes or breaks a deal. Keep a keen eye on this particular aspect of an offer. Is the purchaser waiving their inspection contingency (which, by the way, is rarely recommended)? Are they presenting an ‘as is’ contract, noting that they do not intend to ask for any credits post-inspection? Or does a buyer want the complete ability to inspect and request repair funds or fixes? Details regarding the inspection can certainly make an offer stand out from the rest.
While it’s a given that price absolutely matters, there’s much more to an offer than its denomination. When faced with various options, sellers should take every aspect of an offer into consideration, focusing on which buyer meets their particular needs, exhibits flexibility, and gets them across the finish line as smoothly as possible.
THE MALOW TEAM @ COMPASS
Licensed Real Estate Broker
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