With inventory at an all time low and buyers waiting in the wings to buy, we are suddenly seeing more and more properties receiving multiple offers. We know that sellers love to see an above list price offer, but what else do you look for in an offer?
Financing
While the sales price is important, it is even more important to see what type of financing the buyer has. If you are fortunate to receive an all cash offer, than you need to make sure you also receive Proof of Funds. I like that documentation to be 30-60 days old, and certainly no more than 90 days old. For conventional, FHA and VA financing you want to see a pre-approval letter attached to the offer. Before I present the offers to my seller (if they don't want agents to present to them personally), I always call the lender to find out how "pre-approved" the buyer really is. Because some lenders write a pre-approval letter and ask questions later, I like to ask the lender the following questions upfront:
- Have you reviewed their income tax returns for the past two years?
- Do you have their most recent pay stubs?
- Have you verified their employment?
- Do they need to sale a property prior to making this purchase?
- Do they have the required amount in reserves?
- Do they need closing assistance from the seller?
Terms and Conditions
Just because the sales price may be the same, similar or drastically higher or lower, does not mean that the offer(s) can automatically be accepted or rejected. The terms and conditions should be a huge factor when evaluating the offer(s).
- What are the contingencies? Financing, Appraisal, Home Inspection, etc.
- How long are the contingencies?
- When is the settlement?
- What is the amount of the down payment?
- What is the amount of the earnest money deposit?
Each contingency must be weighed and discussed with the seller. As the listing agent, you will need to review the pros and cons of each contingency. Talk about the "what-ifs" with the seller. And of course, each contingency can be countered.
Remember, we are the real estate experts. Our job is the counsel our client and assist them in making the best decision for their circumstances. Often times, the best price doesn't win, but the combination of price and contingencies (or lack of) wins the house. What do you look for in an offer?
Related Articles
- Ask The Lender The Right Questions
- Buyer Representation Means You Represent The Buyer
- 4 Things You Must Discuss At The Listing Appointment
- How To Handle Multiple Offers
- Just Ask
Real-Life Real Estate Training – The Training You Need, When You Need It
- Have you struggled turning contacts into clients?
- Are you working hard, but hardly making any money?
- Are you beginning to think you made a bad career choice?
If you answered “yes” to any of these questions you are in the right place! The Real-Life Real Estate Training program was designed to transform you and your business so that you achieve your goals. It doesn’t matter what stage in your real estate career you are in…new, experienced, or somewhere in between, our systems will help you focus your time, energy and effort on the right areas of your business.
The Real-Life Real Estate Training program was designed by an active real estate agent, so our program is totally realistic, doable and easy to put into action immediately.
My name is Candy Miles-Crocker and I’d love to talk to you if you still have some questions or need additional information. Fill out my online contact form or give me a call at (202) 669-1924. Check out what our valued clients have said about us on our testimonials page.
Let’s Go to Work!
Comments(3)