So let’s take this scenario, you’re selling your home in Weston, MA, and with your
Realtor’s help, you’ve priced it right – just below $1,000,000. Today at this price point, there’s a limited supply of inventory, a great deal of buyer demand, and your house is in move-in condition. Given all this, you now find yourself in a multiple offer situation, and in short order, you have to decide which offer to take – with your Realtor’s help, of course. So what do you do? How do you navigate these waters? Here are a few tips to help you when you find yourself in this scenario:
- Determine your priorities – Generally 9 times of out 10, price is the most important and compelling component of the offer to sellers. Does that hold true for you as well? Assuming it does, after the pricing consideration, what is the next most important element of the offer? Is it the closing date? Is it the buyer’s financing? Is it the buyer’s profile? Or is it something else? Where do all of these considerations stack up on your priority list? Once you establish your priorities, you’ll be better able to evaluate the strengths of the offers.
- Evaluate the contingencies – The two main contingencies in an offer are inspection (building, pest and radon) and mortgage contingencies. In terms of the former, you’ll want a tight inspection contingency timeframe. The shorter amount of time (standard is 7-10 days), the better because if the deal falls apart over inspection issues, you will have minimized your time off the market. With regard to the latter, there are several questions to consider. How is the buyer financing the purchase of your home? Are they paying cash? Or do they have a mortgage contingency? If they do, how much are they putting down and when is their commitment date? Do some offers include these contingencies and others don’t? The absence of one or more contingencies makes an offer much stronger – assuming the purchase price is in line as well.
- Analyze the buyer profiles – What are the profiles of the buyers, and what is the family (if there is one) makeup? Why are they looking to buy (relocation, expanding family, downsizing), and why have they chosen your house? For example, it might be important to you that the buyers are planning to raise their family in the house – just like you did 30 years before – and are not tearing it down. Or perhaps you see an empty nester as the ideal buyer profile for your home. Getting the “right” buyer with needs and wants consistent with the strengths of your home usually nets a successful transaction.
- Get feedback from your Realtor – In our neck of the woods where the showings are accompanied, your Realtor will have met all of the buyers, and so he/she will be a valuable source of information. What is his/her sense of these buyers? Have they put in offers elsewhere and then backed out of the deals? Do they seem to genuinely love the house or are they just trying to win the multiple offer competition? Choosing a buyer who seems to be emotionally invested in and committed to purchasing your house for all the right reasons will more likely result in a win-win process and outcome.
- Decide how you will respond to the buyers – Part of the offer accepting process also includes how you deal with the offers and respond to the buyers. For example, if you have four offers, will you go back to all four and ask for their “final and best” offers? Will you just work with the two buyers who have the strongest offers and respond to them? Will you ask to keep the runner up’s offer as a back-up offer? These are all pertinent questions to ask as you entertain and evaluate the multiple offers. And on a related note, it will serve you well to respond to your potential buyers in a fair and gracious way. After all, you never know what will happen as you proceed down the path to completing the sale of your home. The offer you choose may implode, and you’ll be forced to revisit the other offers – assuming the buyers are still ready, willing and able.
In today’s market especially when selling a home below $1,000,000, you will often find yourself in the driver’s seat. And though at first pass it sounds great, it also comes with its own set of complications and stressors. Making sure you choose the “right” offer – or at least the offer that will get you to the closing table – is essential. To that end, I’m hopeful that by keeping these five tips in mind, and by delineating the offer evaluation and acceptance process as outlined above, your journey down this road will be less rocky and anxiety-filled and will also be more positive and rewarding.
Have you ever found yourself as a home seller with multiple offers from which to choose? If so, how did you evaluate the offers and decide which one to choose? Was the way you handled the process effective? Do you have tips or thoughts to share on the subject? I can’t wait to hear.
