If you find yourself in the fortunate position of selling your home in what is widely considered a seller’s market, you’ll likely come across an offer or two. Navigating what a good offer looks like—and whether you should decide to accept—can sometimes be a challenge.
However, with the help of your real estate agent and a few tips, you’ll be able to spot the right offer when it comes your way.
More than price
Though it might seem tempting to choose an offer from a prospective offer based on price alone, there are other traits to a good offer.
While the highest offer price might not necessarily mean the best offer on the table, an all-cash offer is pretty appealing. It’s often one of the safest offers available because the seller doesn’t have to worry about financing; there’s no dependency on an outside party to approve a loan.
Because cash offers are not the norm, the next best thing is a buyer’s pre-approval for a loan. Whether it’s a bank, credit union, or mortgage lending company, their lender will provide a letter that states the buyer can receive the loan they need. The approval strengthens the buyer’s offer because it shows that they are reliable and have secured the necessary finances to buy the home.
A contingency clause in the offer contract protects the buyer to back out until a set date if their contingencies are not met. They are conditions to be completed so that the deal can go through.
For example, there’s usually an inspection contingency; if the inspector finds significant issues with the house, the buyer can back out with nothing lost if that’s in the offer contract. Other examples usually deal with financing and the appraisal—sometimes buyers have a contingency to sell their own home to buy yours.
In any case, if there are fewer contingencies, it’s better for you as a seller. That means there are less ways for the buyer to back out once they’re under contract. While contingencies are in no way bad, they aren’t always as attractive from the selling point of view.
Sometimes your home will need repairs that will come up in the inspection. In a solid offer, the buyer might propose to make the repairs themselves, saving you time and money.
Buyers will sometimes include a condition in their offer that asks the seller to cover their closing costs. This is especially common if their offer for the home is high.
Closing costs are usually between 2-5% of the home’s purchase price, so it’s worth figuring out if you’re willing to pay that amount. An offer might be more attractive without this stipulation, but it’s always wise to do the math for yourself.
A closing timeline that works for you
The best kind of closing timeline is one that works for you and your needs. If you’d like to get the transaction done as quickly as possible to move into your next chapter, a buyer who can guarantee a shorter time under contract is ideal, like someone who can pay in cash.
Alternatively, sometimes a longer closing timeline is ideal; when it comes to moving cities or building a new property, it can help to have more time before closing day. If the potential buyer is willing to work with your schedule, it makes their offer attractive.
Mortgage Loan Types
Though each of the different loan types can all equal a successful sale, some are easier to deal with than others. For example, a conventional loan is pretty straightforward to deal with, making it more tempting for buyers.
On the other end of the spectrum, a government option such as an FHA loan can come with a longer timeline and delays because of additional requirements.
Take it or leave it
When it comes to appliances and fixtures within the house—such as light fixtures, the washer and dryer, or the stove, you’ll have to figure out what you’re willing to leave behind versus what you’d rather take with you.
If you’re interested in packing up your favorites, a buyer who doesn’t ask for them can be a significant plus. Their offer might mean a little more if you can easily keep your household goods if you feel inclined to do so.
Though it might not always be the most critical factor (sometimes it can be), price plays an important role in the offer. Just remember to look into all the other details (contingencies, financing, asks) before accepting the highest offer, to ensure that it’s truly the best one.