Some great advice for sellers looking to pick the best offer for their home:
There are more homebuyers than homes currently for sale in today’s market. As a result, it is likely that home sellers will wind up with a multiple offer situation when putting their house up for sale. Accepting the highest offer seems like the easy choice, but it may not always be the best thing to do. Below, I’ve discussed other important considerations when it comes to accepting an offer from a homebuyer.
Pre-Qualified And Pre-Approved Homebuyers
The majority of offers will include a letter from a financial institution specifying that a homebuyer is either pre-qualified or pre-approved for a mortgage loan. Don’t be confused by the fact that people often use these terms interchangeably. There is a significant difference between the two.
Pre-qualification letters can be given to homebuyers who discuss their financial situation with a mortgage lender, who then provides an estimate of the loan amount a buyer will qualify for. At this point, the accuracy of the provided information has not been checked by the mortgage lender. A mortgage lender might be able to provide an accurate loan estimate for a homebuyer who is very self-aware regarding their financial profile. However, home sellers should know that a lender has not yet verified assets, income, debt, or funds available for a down payment. In other words, a pre-qualification letter does not offer much assurance to the seller that the buyer will be able to close the purchase.
In order for homebuyers to get a pre-approval letter, a mortgage lender must run a credit check and verify the items within the full loan application completed by the homebuyer. Pre-approval letters require a more comprehensive process and are much more desirable than pre-qualification letters.
Even though pre-approved buyers are far more desirable, it is still very important that the letter states the remaining conditions for loan approval. For example, all pre-approvals will be subject to change depending on the results of the home appraisal. Home sellers should inquire about any other conditions to the approval as well.
However, home sellers should note that neither letter guarantees a homebuyer will receive a loan because of other variables and issues that could be present, but a pre-approval carries more weight than a mere pre-qualification.
Consider The Contingencies
Nearly all contracts for sale and purchase include clauses that allow buyers to cancel a contract due to specific reasons. For example, nearly all offers incorporate contingencies regarding appraisals and inspections. If the buyer is unable to secure financing or the home inspection produces unsatisfactory results, the buyer is able to terminate the contract without penalty.
Additionally, homebuyers may need to sell the home they currently own to purchase a new one. This stipulation is another contingency that could be added to the contract. When faced with numerous offers, home sellers should look for the one with the least amount of contingencies to increase the likelihood of the purchase closing.
How To Get Multiple Offers
Maybe you are a home seller currently trying to sell your home and you wish you had to choose between multiple offers. Fortunately, any home can receive multiple offers. To create this scenario, all you need is appropriate pricing and an aggressive marketing plan to make sure the entire pool of prospective buyers see your house. Having both in place will increase your odds for receiving multiple offers on your home which is the best way for you to get top dollar for your house.
If you are considering selling your home, or are currently trying to do so, make sure that you select an experienced and active real estate agent who can bring multiple buyers to the table and then assist you in negotiating the offer that will work best for you.Joe Manausa, MBA
Joe Manausa Real Estate