As the market remains competitive for Buyers, Sellers need to give careful consideration when evaluating offers, especially when there are multiple offers. Accepting an offer that doesn’t close on time or at all can be very costly and frustrating for all parties. Here are three things to consider, in addition to the price:
1. Does the offer have a home sale contingency? If so, this adds another wrinkle or layer to your transaction, even if the home is in contract. Worst of all, as a Seller you have no control and limited access to information regarding the sale. If you decide to go this route, get a copy of the purchase contract and find out which contingencies have and have not be met.
2. What type of financing is your prospective buyer approved for and how much money are they going to be putting down? Conventional financing has fewer strings attached and in most cases fewer issues with appraisals and underwriting. A larger down payment also makes any issues with the appraisal easier to deal with. Find out if the Buyer is self-employed or salaried. Being self-employed can be a problem in underwriting, especially if the borrower has large write offs.
3. How much Earnest Money is being offered? Most people don’t pay much attention to earnest money. However, it says a lot about how committed a buyer is to your transaction. A larger deposit implies the Buyer really wants the house and likely has the means to complete the sale.
Since you cannot eliminate risk altogether, keep these tips in mind and you can increase your chances of having a successful closing with minimal stress.