Are you selling your home and reviewing several offers? Congratulations! You’re well on your way to getting as much as possible out of what is likely your largest asset. But when it comes to picking an offer, sometimes it’s important to take a step back and recognize that your bottom line shouldn’t be your only consideration.
In many instances, the terms a potential buyer includes in the offer also play an essential part. These terms can reveal just how many hurdles you’ll have to clear to reach the closing table efficiently. That’s why it’s crucial for every seller to review an offer—beyond the dollar amount—before settling on a buyer.
To help you navigate this process, we’ve outlined four important factors to consider in an offer besides money. Here’s everything you need to know about choosing the best offer when selling your home.
1. Research Your Preferred Financing Method
As a seller, you likely have an offer amount in mind that you’d like buyers to meet or exceed. But remember, a buyer must prove they can afford the purchase—regardless of what numbers are being discussed.
- If the buyer plans to finance, there should always be a pre-approval letter from their lender included with the offer.
- For cash buyers, ask for proof of funds—usually a bank or investment account statement—demonstrating they have the funds to complete the transaction.
If you need to sell your home quickly, you might prefer an all-cash offer. Cash deals typically eliminate the delays associated with mortgage approvals and reduce risk, offering a shorter escrow period. But be cautious:
- All-cash buyers have negotiation power and may offer less than your asking price.
- Weigh the pros and cons before accepting a cash offer over one backed by a mortgage.
Read more about financing options for home sellers on NAR’s Guide.
2. Look for a Larger Earnest Money Deposit
Another sign of a strong offer is a substantial earnest money deposit (good-faith deposit):
- Typically 1% to 2% of the sale price is normal.
- Higher deposits show greater commitment from the buyer.
If the sale closes, this deposit goes towards the down payment. However, if the buyer breaks the contract and walks away, you may be entitled to keep the deposit as compensation.
3. Consider Fewer Contingencies
Contingencies are conditions that must be met for the transaction to proceed. Common contingencies include:
- Inspection contingency: Gives buyers time to inspect the home.
- Appraisal contingency: Requires the property to appraise for the sale price.
The more contingencies, the greater the risk the deal could fall through—allowing buyers to walk away with their earnest money if conditions aren’t met.
Tips for sellers:
- Choose offers with the fewest contingencies.
- Fewer contingencies = less risk of the sale falling apart.
- Cash offers are often accepted even at lower prices, as they remove much of the uncertainty.
Learn more about real estate contingencies at Investopedia’s Real Estate Contingency Guide.
4. Opt for an Ideal Closing Timeline
Finally, consider the closing timeline that works best for you.
- Do you need a quick closing?
- Or do you need more time to pack or find another home?
Sometimes, an offer with a lower price may be more attractive if the timing fits your needs. Moving can be overwhelming, so choose the timeline that works for you—not just the highest bidder.
Conclusion
Choosing the best offer when selling your home isn’t just about the highest price.
Factors like financing, earnest money, contingencies, and closing timelines all play a crucial role in a smooth, successful sale.
Ready to maximize your home sale?
Keep these four key factors in mind, and you’ll boost your chances of a seamless transaction and a happy outcome.
For more expert tips on selling your home, visit Realtor.com’s Home Selling Advice.
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