You have your home for sale and you got an offer. How do you choose the best offer when selling? Hint: It’s not the price!!

There is a lot of work in selling your home: decluttering, pre-listing inspection then dealing with repairs, paint, staging, photos, video, living outside the home while having the house for sale or staying in your home but it feels like a hotel since you have to keep it spotless and be ready to leave on a short notice for a potential buyer showing appointment. 

It gets exciting when you receive an offer. Naturally the first thing you would look at is the price. Everyone does that. But is the price the most important factor? I think not.  Here are 5 important factors:

1. Price: Yes, we want the highest price possible

2. Deposit: Is the buyer putting down 5% of the purchase price or more? The higher the deposit the better it is since it is less likely the buyer walks away if they put a larger deposit

3. Buyer: This is an important factor and is more important in a slowing real estate market. The buyer profile matters because if they can’t close then we have a big problem. Having your real estate agent investigate who the buyer is and their ability to close is important. Can you imagine if you bought a house and the proceeds from the sale of the current home will be used for the new purchase as a downpayment then find out a few days before closing the buyer can’t close? Don’t imagine that scenario, it’ll increase your blood pressure. Screening the buyer is very important

4. Closing Date: The real estate market can change very quickly from strong sellers market to buyers market. The longer the closing date the more risk “things” might happen. If the buyer puts in a 90-120 day closing period, what if they lose their job? What if the interest rates rise quickly and they no longer qualify for a mortgage? What if their stock portfolio drops significantly they don’t have enough funds to liquidate for the down payment. Quick close is preferred. 30-45 days is a good period as long as you are able to move out of your current home in that period of time. In cases where the buyer needs a long closing, ask for a second deposit after a set number of days. The more the buyer provides as a deposit “the more skin in the game” they have

5. Terms and Conditions: The verbage put into the agreement of purchase and sale schedule matters. Your listing agent needs to review in detail and protect you from any clause that would work in the benefit of the buyer. Do the conditions make sense? For example, condition on financing for 3-5 business days is reasonable versus 10 business days. Another example: Is the offer conditional on the buyer selling their current home? Another example: is the buyer asking for warranties and guarantees that survive the closing date?

Selling your home is a large transaction. It requires looking out for factors and details beyond the selling price which will save you lots of sleepless nights and unnecessary stress!!

Thinking of selling your home or investment property? Reach out.