Evaluating an Offer: It Isn't Always About the Money

By
Real Estate Agent with RE/MAX Select NJ# 9483506

Now is a busy time in the Westfield luxury real estate market. Sometimes, sellers receive several offers at one time. This is definitely a nice problem to have. When evaluating an offer, other options besides money factor into accepting or rejecting it.

When evaluating an offer on your Westfield home, you must consider several different factors before accepting or rejecting it. Money is only one of them.

Evaluating an Offer: It Isn't Always About the Money

Contingencies

Search Westfield luxury homes for sale Most real estate transactions include contingencies of one sort or another. Typical contingencies include a home inspection, clearing the title, appraisal, financing, and sale of the buyer's current home. When evaluating an offer, one with fewer contingencies attached looks more attractive, even if the offer comes in lower. Unless they offer substantially more than the list price, a buyer with a laundry list of requests might not be worth the hassle.

All-Cash Offers

With all-cash offers, you avoid certain contingencies (like the financing contingency). This shortens the escrow period and limits the chance of the deal falling through. Also, you don't have to wait for the buyer's home to sell. Likewise for financing. They still may require an inspection or appraisal. And most buyers want the title to clear first. A slightly lower all-cash offer may appear more attractive to you than a higher offer waiting to be approved for a loan. This especially holds true when you need to sell quickly (new job starting up out of state, for example).

Financing

Most buyers require a mortgage loan to purchase a property. When evaluating an offer, see if they have their financing in place right now. If they're waiting for approval or haven't even started the loan process yet, you might want to move on to a buyer whose offer includes an approval letter.

Length of Escrow

Another consideration when evaluating an offer is how long of an escrow the buyer wants. If you have a short time frame to work with before you need to move, a 15-30 day escrow sounds appealing. On the other hand, you might still be looking for another Westfield home to move into. In that case, accept an offer with a longer escrow. Take the offer that works best for your specific situation.

Earnest Money Deposit

Finally, look at their Earnest Money Deposit (or "good faith deposit"). This is the money that the buyer puts down to show that they are serious about their offer. The amount varies (usually about 1-3% of the purchase price). Typically, the title company holds it in a special account. It then gets applied to the buyer's down payment when a deal is reached. However, if the buyer backs out for any reason not specified in the sales agreement, the seller keeps the Earnest Money Deposit for themselves.

Take your time evaluating an offer. Always discuss each and every offer you receive with your Westfield REALTOR®. Use their knowledge of the real estate market to help you decide which offer to accept and which to reject.

Scott Gleason, CRS at RE/MAX Select, Luxury Homes

Originally posted on my Westfield area luxury real estate blog here: http://www.luxuryhomesnj.com/uncategorized/evaluating-an-offer-on-your-home/.

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Rainer
631,026
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

Price can override pretty much any contingency in a real estate offer.  But all things need to weighed in before the final decision is made!!!

Evaluating an Offer: It Isn't Always About the Money

Aug 24, 2018 04:02 AM #1
Rainmaker
3,712,306
Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Great reminder... I'm always telling sellers that it's not always just about the price... in my own case, three times I accepted offers that were slightly lower because those buyers were willing to close at my convenience as in one case I was doing a major renovation and in two building new homes. Not having to move twice was worth taking a bit less money and the fact that I wasn't stressed over a quick move out was priceless.

Aug 24, 2018 04:07 AM #2
Rainmaker
4,433,127
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

This is a great post for home sellers. I hope they will read it and learn

Aug 24, 2018 04:27 AM #3
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Rainmaker
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Scott Gleason

Westfield NJ New Homes Specialist
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