This is a great blog about handling multiple offers written by Jane Peters out in beautiful California. Here in Southeast Florida market prices are trending up. Only the smart buyers that have lost a few deals have caught on to this and are writing offers that get them the property. The buyers that are still trying to use the low appraisal on out dated "solds" are behind the curve. Not all Florida agents agree with this but the bottom line is who gets the property. So, the buyer that waives the appraisal contingency is probably the buyer that means business.
Thinking of selling your Los Angeles home? Unless you have been under a rock you will know that now is a strong sellers’ market. Chances are if you put your home up for sale it is going to get offers almost immediately, more than one. Of course you still need to list the property at or close to market price. If you overprice it then it is still going to sit and you will end up getting less in the end.
It should be a simple process to pick the successful buyer right? Just choose the one who offers you the most money, especially if it is all cash.
There is more to just the highest price offered on the listing. Much more.
Your Los Angeles Realtor® will work with you to determine the best offer, not just the highest. What do I mean by the “best offer”? Here are some scenarios to consider based on having received nine offers, a pretty conservative number based on what is going on these days:
- All offers are at or over asking price. In a multiple offer situation a buyer’s agent will be advising their client not to offer any less.
- Three are all cash offers and six require a loan. Two of the cash offers are a little below the offers requiring loans and one is equal to.
- Four of the offers requiring a loan have an appraisal contingency in place which means that should the property not appraise then the buyer may ask you to reduce the price, or they may walk. They may decide to pay the difference themselves, but that is a risk. The other two buyers have removed the appraisal contingency.
- Of course your agent will check the financial viability of the buyers, either though proof of funds for the cash offers, or by talking to the lender of those requiring a loan, and maybe asking for proof of funds for those also.
Let’s put the three cash offers and the two loan offers without an appraisal contingency in the top position for consideration. Let’s say there is not a huge difference in the price offered, we will now look at the five offers and how clean they are:
- There may be an offer which stands out because most if not all the contingencies have been removed (an inspection has to be waived by the buyer), then you may gravitate towards that.
- If offers are similar then you may gravitate towards the cash buyer since they are the most likely to close as they are not at the mercy of getting a loan.
- Another consideration will be a personal one. If there has been any interaction between your agent and the buyer and his or her agent, they may get a sense of the ease, or lack of it, that will accompany the escrow process. Working with difficult personalities can jettison a deal.
- However, if you are not sure whom you want to pick then you can issue a counter offer asking for “best and final” from each buyer or setting the terms and price you want. You can issue them all the same counter or each a different one.
One thing to be careful with is the removal of the appraisal contingency on a loan offer. You do not want to find that the property does not appraise well and that the buyer finds a way to get out of their contract. The way properties are being bid up that is a danger.
Getting multiple offers sounds like a dream, but sifting through them and picking the right buyer is hard work.
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Jane Peters, connecting you to the L.A. real estate scene
Buying or selling real estate in Los Angeles can be an overwhelming process. Contact Jane Peters, Los Angeles realtor specializing in absentee owners, out of town buyers, and those who need that extra attention, in order to make the transaction a smooth, trouble-free, and fun experience.
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