Getting multiple offers on your home is a good position to be in. It suggests the market favors sellers and your home has attractive qualities to different types of buyers. But is the offer for the most money the best offer? Not always. Here are some suggestions on how to decide which offer to accept in Chicago.
Financing the Purchase
Buyers finance homes in a variety of different ways. Sellers are not privy to who has good credit or not, but they do have some control over understanding who is a stronger financial prospect. After all, nothing is worse than getting to the end of a 45-day escrow process to realize the buyers didn’t qualify for the loan and the mortgage won’t fund. Sellers don’t want to be forced to start the marketing process over and may have already started moving and making other financial obligations.
This is why cash offers hold so much weight when deciding the best offer. Many sellers will accept slightly lower sales prices with the knowledge of cash coming in to close. Aside from cash, buyers with pre-approval letters mean they have gone through the loan underwriting process and meet loan needs. These are stronger than pre-qualification letters which only mean buyers got a ballpark idea of their qualifications.
Contingency Terms
Sellers can often be concerned with the inspection process of a home sale. Any older home will have things that might need some work. How buyers respond to inspection reports can kill the deal or create negotiation points costing thousands. When buyers are willing to waive inspections or reduce inspection periods, this becomes a favorable contract term for sellers. It means the buyers know old properties have problems and don’t intend to nickel and dime sellers.
The length of time for contingencies is a big factor in defining favorable terms. As already mentioned, the inspection period is one. Another key contingency is funding. A 60-day escrow with a 40-day funding contingency gives sellers time to move after confirmation that the loan is approved and ready for funding.
The Overall Package
When considering offers, the sellers’ personal situation is also a factor. How fast does the home need to sell? Probate and estate taxes might accelerate the timing need or even define the minimum sales price. A seller with a new job in a new city that needs to relocate might affect the timeline and reasons for accepting an offer that closes faster. Some sellers can’t move until the home is closed and need a buyer willing to do a rent-back with enough time to allow sellers to coordinate moving.
Agents need to discuss all factors in offers with sellers to help them decide what is the best course of action for their situation. It is possible to counter-offer a solid offer that just doesn’t quite meet one or two needs. Good selling agents go back to offers and explain the multiple offer situation, explaining the need and seeing if buyers will come back with a best and final. This often gets sellers where they want to be, using other buyers’ offers against the top offers.