When real estate markets highly favor a home seller, bidding wars are common. In fact, in some cases, the absence of a bidding war is unusual. After all, it means a higher selling price.
Still, as tempting as it is to choose the highest bid and close the deal, it’s often not the best move.
It is essential to learn how to handle multiple offers on a house. The right offer is determined by your goals and the local housing market. Homes available for sale in the real estate market are not enough to meet the demand.
As a seller, you can expect to get bids from many buyers. It feels great to know this, but it can be overwhelming to make the right decision. If you don’t know what to do with multiple offers on your house, follow these steps to choose the right one.
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Consider Your Priorities
Knowing your priorities will help you identify the best offer for your home. Decide on the most significant profit you expect to make and how quickly you intend to sell your house.
Of course, most sellers expect to make the most amount of money. But just like a lot of things in life, it may not be straightforward.
Two things will determine the offer you’ll accept
- When you want to move out of your home
- How ready the buyer is to buy your property
A buyer may present you with a reasonable offer. But later, you realize they have not yet secured their financing. Or they may not have an offer on their house yet. This is going to slow down your selling process.
Also, you may find a buyer with a lower offer but is ready to move in as soon as possible. It means that your circumstances will determine which buyer to choose.
Some people may prefer to stay put and wait for the highest value for their home. Others may take less money because they want to move out faster. You need to know how to handle multiple offers on your house so that you can know which deal to accept.
Know Your Market
Local market conditions will determine how you handle your home offers. If you get offers at the set asking price, then you have room to negotiate. Ask the buyer to put their bids and best offers forward within a specific deadline to see what you get.
If the unemployment rate is up, it’s best to avoid offers with financing contingencies. Instead, opt for a cash offer or one that’s pre-approved.
Make sure your property is well represented on the market to attract the right buyers. It means ensuring your property is on social media platforms to gain the right attention.
Once you plan your marketing position, offers will begin rolling in. Your home will quickly sell if priced correctly. Be realistic about the actual value of your property.
Don’t overvalue improvements that you’ve already made. Most buyers are not willing to pay a lot of money for upgrades that you made to fit your taste. When pricing your home, check sold homes in your local area of similar features and size.
Knowing your competition in the market is crucial when selling your house. Everyone says that understanding your market is everything. Saying is one thing, but knowing why will help you stay ahead of your competition.
Get to know what buyers like and how much they are willing to spend, and it will be easy for you to identify potential buyers.
Work With a Reliable Agent
Real estate agents are professional negotiators. It’s essential to have one by your side to get more cash for your home.
Selling your house by yourself increases the likelihood of getting less cash. But an agent who has the right expertise can handle many offers. They also have the right systems in place to help manage bids from different buyers for you.
Choose an agent who is open and honest when communicating with you and other agents. They should respond first to new information. Make sure they tell potential buyers about the highest bid.
Before choosing a real estate agent, take your time to do research. Choose someone who will have your best interest at heart. A professional who knows the ins and outs of the real estate market is the best.
Working with the best agent will ensure you get top dollar for your property. Identify a realtor who will work for you and with you. You will be interacting with the agent many times, and you need someone honest and relatable.
They should be good at negotiating and talking. Interview at least three to four agents and identify one who you are most comfortable with.
Compare Contingencies
Before you accept an offer from a specific buyer, you need to weigh the contingencies. There are certain conditions that buyers include, and if they’re not met, they may cancel the deal.
Contingencies are of different types. Inspection contingency means that you have to do or pay for the necessary repairs. An appraisal contingency means renegotiating the deal if your home fails to appraise.
Financing contingencies can make a buyer close the deal if they don’t qualify for a mortgage. A sale contingency is the riskiest among them. Selling your home is based on the sale of the potential buyer’s current property.
When selling a house, ensure that your contract has fewer contingencies. That way they are fewer chances that a potential buyer will back out of the deal. Weigh the buyers’ contingencies against your tolerance for risk and priorities.
Consider How the Buyer Will Pay
Buyers willing to pay in cash means you don’t have to worry about if they qualify for a mortgage. You’re more likely to close the deal quickly.
To be on the safe side, request potential buyers who want to pay in cash for documentation. You need to know that they have sufficient assets and savings to buy in cash.
But in most cases, buyers need a mortgage. They need to be pre-approved for a home loan. It’s better to accept an offer from an approved buyer than one who has not arranged for any financing.
Talk to your agent to check out the mortgage company the buyer intends to use. Confirm that the lender has a reputation for closing deals quickly and is well known in your area.
If you don’t know the lender do research and request the buyer to provide more information. All these details are relevant to finding the right buyer.
Make Sure Scheduling for Tours Is Easy
The selling process of any home involves the scheduling of tours. Potential buyers need to view your property to ensure that it has the features they want.
There are high chances that you’re going to get plenty of showings within the first few days. Your real estate agent can help you with this. You may have to stay in a hotel during those days buyers come to check out your property.
Buying a home is a significant investment, especially for a first-time buyer. It’s not something that you should take lightly. A real estate agent can schedule multiple private tours within a short time.
They’ll also help you to stage your home to match what buyers are looking for. Most buyers are uncomfortable viewing a house when the seller is there.
Working with an agent will ensure that your home is ready to show and you’re not there when they’re showing it.
If you are in a hurry to sell, give priority to a pre-approved buyer. But if you need more time, identify a buyer who can accommodate you. In most cases, buyers are willing to allow the seller to stay in the home for 60 days after closing.
Start With Price but Don’t Stop There
It’s normal to be enticed by an offer with a top-dollar price. You’re more likely to consider it more so if it’s more than your asking price. But you need to realize that the highest bidder may fail to qualify for the mortgage amount required.
Before accepting the amount offered, review the terms of the contract. You can do so with your real estate agent or attorney. You need to know in advance the amount of cash the buyer is willing to put down.
A bigger down payment and a lower home loan signify that the buyer will most likely qualify for a mortgage. Your real estate agent will gauge the number of offers presented.
As a seller, you can disclose the number of offers to buyers to signal competition. It will help you get more aggressive offers.
Be careful with this tactic because you may scare some buyers away. This method works best if your property is hot in the market.
Negotiate
Getting home offers does not mean you have to pick the highest bid. Remember, you’re the seller, so you have the upper hand. Make a counter-offer to the best bidder if there are certain things you don’t like.
Ask them to up their bid or remove a contingency. Also, ask for an appraisal gap guarantee. It means that the buyer will pay the difference between the appraised value and their offer.
While doing all these, all you can hope for is they say a yes. As soon as you get plenty of offers, you will feel overwhelmed by the information from all sides. But dragging the negotiations is an essential step to ensure you get the best value for your home.
Make sure you consider what other buyers are offering to put in. Give everyone a chance to bid.
Once you’ve got all the offers, you can begin counter-offers to motivate buyers. It will push them to put their best offer on the table.
Review Extras From Buyers
Some buyers may pay a certain percentage of your closing costs as a strategy to outbid other offers. Another buyer may offer an escalation clause to outbid other offers by a certain amount.
It’s a plus if you have several offers with similar contingency terms and pricing. It is exciting to get many bids when you’re selling your house.
But you need to consider all essential aspects of the offer. They include the ability to close, price, and contingencies. That way you will choose the best of them all.
As much as backups are of great importance, leave the door open. Buyers can quickly get overly enthusiastic and settle above their comfort level. Or they may bid way above the actual value of the property.
A winning bidder may choose to walk away when they take time to assess the house’s worth later. It’s important always to leave the room with your backup to be called upon when necessary.
Get It Under Contract
After being presented with all the offers, choose the one you want. It’s not something to stress about because, in most cases, it’s an obvious choice. Head into Escrow after you accept the offer.
Your agent should tell other potential buyers that they were unsuccessful. They should do this out of courtesy.
Secondly, you also need to keep potential buyers close. You may need them when selling a different property in the future. Remember that you still have the asset that they need. Don’t negotiate when under a contract.
Make sure you inform them that the property is off the market. A purchase agreement letter is created between two parties (seller and buyer). A contract is a legal document that shows the terms and conditions of sale.
The agreement helps to avoid any disputes related to buying or selling the house in the future. It is a formal document that acts as a confirmation of a business transaction.
You Now Know How to Handle Multiple Offers on a House
We hope you’ve learned how to handle multiple offers on a house. If you are in urgent need of cash, you need to identify a real estate buyer.
Choose a buyer who’s willing to pay for your home in minutes with zero obligation.
Here at iBuyer, we desire to assist you in making the best decision about how to sell your home.
We’ll arm you with all the information you need and walk you through the entire process. We’ll educate you on the hassle, uncertainty, and financial cost of home selling.
