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What Sellers Should Look For in an Offer

Wednesday, December 15, 2021   /   by Margie Wright

What Sellers Should Look For in an Offer

Selling a home is such an exciting time! You've gone through the process of getting your home ready, updating things, and working with your real estate agent to determine the best possible price for your home. The offers start rolling in... how do you choose?! There will no doubt be different offers of different amounts with different financing methods. Some people even have certain contingencies or requests for you along with their deal. So which one do you go for? 

If only it could be that simple...

When you start getting the offers in, there's a few things you want to look at. It can help to go ahead and start talking to your agent about these factors ahead of time so you don't run into unexpected problems or get too overwhelmed later down the line.

1. Research your preferred financing method

It will likely happen that different numbers will be thrown around for the offer on your home. One of the most important things, regardless of what price is decided on in the end, is that the buyer can and will pay what they say they will. They need to have the proof that the transaction can be completed on time with no problems.

For those getting a mortgage, there should always be a pre-approval letter on the lender's letterhead. For those that are making cash offers, ask for proof of funds. This usually comes in the form of a bank or investment account statement that shows the buyer has the necessary funds to complete the transaction. Beware, though... those making all-cash offers have more negotiation power and typically want something in return for bringing so much money to the table.

2. Look for a larger earnest money deposit

You may want to pick an offer with a higher earnest money deposit, which is also known as a good-faith deposit. This is a sum of money that a buyer entrusts to the seller's brokerage firm to prove that he is serious about purchasing the home. The normal deposit amount is 1%-2% of the sale price, but it can be worth it to choose one that's higher. That will typically mean the buyer is much more serious about going through with the deal.

The earnest money deposit goes towards the buyer's down payment if the buyer chooses to close on the home. However, if the buyer decides to walk away from the deal, it is possible that you can get that money as consolation.

3. Consider fewer contingencies

Contingencies are benchmarks set by buyers that need to be met for the transaction on the home to continue on. The contingencies set in the contract must be met or the buyer can walk away from the deal. A common one is an inspection contingency, meaning that the buyer has to have time to inspect the home. Anything that is found to need repairs, the buyer can ask you to fix before closing on the home. 

While contingencies can assure many things, especially helping the buyer out greatly, the caveat is that anytime a contingency isn't met, the buyer can walk away from the purchase with the earnest deposit money in hand. Obviously, this means that as the seller, you want to choose the offer that has the fewest amount of contingencies. This gives the buyer fewer chances to back out of the deal.

4. Look for an ideal closing time

It can be tempting to choose the offer with the quickest possible closing time, but it may not be the best option for you. If you're still living in the home, think about the amount of time that it will take for you to move out entirely. I can assure you that it doesn't happen as fast as you think it will. Unless you have very few things to pack up, or you're not actively living in the home, it might be good to consider choosing the offer that as a better timeline for you. Though it can result in a lower sale price, the ease of a timeframe that works for you easily makes up for it.

  homes, financing, home sellers, offers, sellers

Hurst Real Estate and Auction - Margie Wright Property Marketing Group
Margie Wright
221 East Main Street, Suite 103
Morristown, TN 37814

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