So, you hit the real estate jackpot and have multiple bids for your home. Congratulations! Now you have a different kind of problem: which offer should you choose? How can you pick the right buyer, the one that will not only offer the best conditions but go through the sale?
In this blog post, we'll explore how to choose the best offer among multiple bids.
As always, cash is king, and pre-approved mortgages are its viceroy. However, if the buyer needs to secure a mortgage to complete the purchase, it's important to understand and evaluate their chances of securing a mortgage, including those that concern you.
For example, if the buyer is using an FHA loan, certain requirements might be needed to be met before the sale can be completed, such as repairs that need to be made to the property, which would be your responsibility and directly impact the buyer's ability to secure the loan.
Another common requirement for securing a mortgage is an appraisal of the property. If the property appraises for less than the agreed-upon sale price, you and the buyer may need to renegotiate the offer or come up with additional funds to make up the difference.
Finally, the buyer's financing can also impact the closing timeline. If the buyer is pre-approved for a mortgage, the sale may be able to close more quickly than if the buyer needs to secure financing after making an offer.
Contingencies are clauses in the contract that allow the buyer to back out of the sale under certain conditions (i.e. cancel the sale if they are unable to secure financing) While some contingencies are standard, such as an inspection contingency, others may be more specific to the buyer's needs.
Contingencies can impact the sale price of your home. If the buyer requires repairs to be made before closing, this may reduce the amount of money you receive for the sale. It can also impact the timeline for the sale because, if the buyer requires a certain amount of time to complete an inspection or secure financing, this may delay the closing date.
The most important thing you must consider when choosing a buyer is that, just as with financing, contingencies increase the risk of the sale falling through. If the buyer's contingencies are not met, they may be able to back out of the sale without penalty. This can be frustrating and costly, especially if you have already made plans to move or have purchased another home.
The earnest money indicates the buyer's seriousness and commitment to the sale, like a good faith deposit. It is a sum of money that the buyer puts down to show that they are serious about purchasing the property.
If you pick an offer and it does not concrete for any reason, you would've not only lost time and money but also some of the other bidders -if not all! The earnest money deposit can cover damages if the buyer backs out of the sale without a valid reason.
Nevertheless, an earnest money deposit, especially a high one, can create a sense of urgency for the buyer. Once they have put down a deposit, they may feel more motivated to move forward with the sale and complete the necessary steps to finalize the purchase.
You can't have too many good bidders, and Simply Homes is probably one of the best!
At Simply Homes, we buy houses for cash, as-is, and fast. We bring to the table a seamless selling process for you, offering the most market-accurate offer for your home. Just enter your address to find out if we are interested in your property. If we are, you will receive an instant offer and add an excellent alternative to your pool of bidders!