How to Handle Multiple Offers on a House
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Getting multiple offers on a property is every seller’s dream. Generating auction wars means there is a good chance your home will sell for a good profit. The question, however, is how do you handle all of these offers to make sure you get the most out of your home by selling it. A real estate agent, of course, could help you get the offers and process them. Or if you are planning to sell as “For Sale By Owner (FSBO)”, you need to know how to handle this situation.
But first! You may have landed on this blog, not because you actually have multiple offers, but because you are simply wondering what to do if the situation arises. Well, in that case, you might be curious how a seller can end up in such a lucky situation. Here’s how you too can create a house bidding war:
- Sell the home at a lower property value
- Sell your home when the market is in sellers’ favor (the best time to sell a home)
- Create a great real estate ad on various paid and free platforms
- Improve the house for sale before staging the house.
- Organize open houses for brokers and potential buyers
So what happens when there are multiple offers on a home? The real estate bidding wars will become very intense and the offers to buy your house will go up more and more. Therefore, you must know how to manage several offers on a home. As a homeowner, here are some factors to consider when selling your home:
1. Consider the real value of your home
When buyers bid really high, ask yourself how the offer compares to the real value of the home. The higher the property price, the more difficult it can be for the buyer to obtain financing from the lender. Whenever a buyer obtains a mortgage to buy a home, lenders often request an appraisal to determine the property’s value before releasing financing. Therefore, it can be devastating for both the seller and the buyer if the evaluation reveals a lower selling price. If the loan application is successful, the buyer will still have to increase the difference between the offer and the loan amount. This could further create complications for both parties during the real estate negotiation process for the home.
2. Don’t just look at the offer
The goal of every real estate investor and owner is to sell to the buyer who offers the highest sale price. However, your decision to sell should not be based solely on the highest bidder. The person making a high bid may not be eligible for a loan large enough to purchase the property at the agreed price. This could cause problems at the closing table. Before doing anything, check to see if the buyer is pre-approved for the home loan. Therefore, in addition to considering the highest offer, take the time to review the terms and conditions of the contract with a real estate agent. For example, consider how much money the buyer has to pay in advance before applying for a loan.
3. Does the buyer pay in cash?
When it comes to managing multiple offers on a home, consider whether the buyer is paying with cash or using a loan. If you find a buyer willing to buy the house for cash, go for it. A cash offer means that you can skip all the steps involved when the transaction involves a loan. You don’t have to worry about the appraisal process and the sale can be closed much faster. Some sellers even prefer to accept a lower cash offer than a higher offer that requires mortgage financing. As they say, “money is king”.
4. Carefully consider contingencies
A good real estate contract should include the fewest possible contingencies. If you can find one without contingency, all the better. Some buyers may want to add conditions to their offer that will complicate the real estate transaction. For example, they may require that your home pass an inspection or that your property be appraised for a specific amount. Others might even include a stipulation that your current home must be sold before purchasing your property. Such contingencies are a complete waste of time when trying to sell your home. Hire a real estate agent and ask them to do their due diligence to find out what contingencies the seller has included in the contract. The terms of the final contract should also be included in the buyer’s pre-approval letter.
5. Review closing periods
Most sellers want their homes to sell as quickly as possible. As a homeowner, you need to know how to sell your home quickly. However, you may find buyers who want to extend the deal for months. If you’re not in a rush and have some free time, it may be beneficial to wait for the highest bid. However, when there are multiple offers, you shouldn’t waste a second as both the seller and the buyer don’t want to wait. Find a buyer who gives you the best deal in the shortest time possible.
6. Consider Buyer Extras
To differentiate themselves from other bidders, some buyers may volunteer to pay a percentage of their closing costs. Others could bid with an escalation clause to outbid other buyers by a specific amount. If you want to save money, consider offers with those additional terms.
7. Reveal the offers on the table
One of the biggest myths when it comes to managing multiple offers on a home is that sellers and agents should not disclose information about the offers they have received. This is a myth in-home selling guides that has cost sellers and agents dearly. With the seller’s permission, the agent may disclose the number of other offers he has received for the property. This will motivate buyers to bid even more, resulting in a high sales price for the home.
8. Don’t be greedy
To try to get the highest possible offer on your property, avoid the temptation to be greedy. Don’t delay the sales process in hopes of receiving more offers. Being too slow could end up putting off bidders you already have. Also, don’t be dishonest with potential buyers for trying to get high offers. For example, don’t exaggerate the condition of your house when listing. If buyers find out about your deception, the offers could drop dramatically.
Now that you know what to do when there are multiple offers on a home, get to work on generating them! Get started by listing your home for a flat fee of just $ 399 in Falaya.
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