How To Choose The Best Offer In A Bidding War
How To Choose The Best Offer In A Bidding War
If you know someone who’s sold their home, you’ve likely heard a bidding war story or two.
Home sales are zooming along at a record pace. Yet buyers continue to run into roadblocks. There just aren’t enough homes on the market to keep up with demand.
So, how do you as the seller find the best bid in this market?
1. Turn Up the Competitive Heat
When the market is booming, it can be tempting to raise your asking price as high as it can go, but we caution against that approach. Choosing just the right price point is critical for maximizing the interest and number of offers.
Now, that doesn’t mean you should aim for the lowest price point on the street. You want to be sure that your home represents the best value based on its location, condition, and price.
Ask an agent you trust to pull a comparative market analysis so you can price it right from the get-go. Then work with your agent to get the word out as soon as you list your home.
2. Give Buyers a Deadline
In real estate, your first offer is always your best, but in a strong seller’s market, that may not always be the case.
Say you put your home on the market on Monday morning and by Thursday 30 people have already toured your home and offers are piling in. How do you know where to draw the line? Your agent should set a deadline. She will be clear that you would accept offers through 5pm Friday. This will also create a sense of urgency, and it helps you compare the best offers before deciding on an offer.
3. Consider the Big Picture
Now let’s talk about what makes a strong offer. We all know price pulls a lot of sway, but it shouldn’t be the deciding factor. Here what matters as well:
• Financial strength: You don’t want to take the highest bid only to find out the buyer can’t back it up with cash. That’s why it’s important to look at the bigger financial picture. Has the buyer been preapproved for a mortgage? Are they offering more earnest money or a bigger down payment? Is it an all-cash offer?
• Buyer concessions: It’s easy to get so caught up in what’s in it for you that you overlook buyer requests that may be part of an offer. Study every offer to be sure you understand the give and take that comes with it. For instance, one full-price offer might ask for $3,000 in closing costs, while another has no concessions. Do the math to determine your best bottom line. If you’re seeking for a trusted home buyer, click here.
• Flexibility: Many folks have no trouble selling a home in this market. The hard part is beating out buyers to your next home. This was one of the factors that swayed Jen’s decision. The winning buyer offered to let Jen’s family stay put for up to two months after closing if needed. That took a lot of stress out of the sale and gave Jen time to find the right place for her family.
4. Beware the Pitfalls
Weighing offers puts you in the seat of power. But be careful not to let it go to your head.
Stringing buyers along to build drama, for example, can backfire if you wait too long to respond. “Some of them will lose interest and withdraw their offers,” Shannon says.
Counter offers are another slippery slope. Think about the number of serious offers you have in hand before upping the ante. If you only have two offers and you lose the best one, you will wish you’d chosen another counteroffer.