How to Choose the Best Offer When Selling Your Home

Selling your home can be an exciting yet challenging experience, especially when you have multiple offers on the table. While having several interested buyers is a good problem to have, it can also make the decision-making process more complex. At O1ne Mortgage, we understand the intricacies of real estate transactions and are here to help you navigate through them. Call us at 213-732-3074 for any mortgage service needs. Here are four essential tips to help you decide between multiple offers on your home.

1. Closely Compare Offers

Not all offers are created equal. An enthusiastic buyer might make an offer, but that doesn’t necessarily mean they are financially ready to buy your home or that their offer meets your expectations. Here are three key details to consider:

Their Offer Price

Start by comparing all bids. According to Redfin, over 23% of homes sold for more than the listing price in January 2024. The right buyer may be willing to offer more than your asking price, giving you a better deal.

Whether They’re Preapproved

Buyers who have been preapproved for a mortgage are in a better position to receive funding from their lender. The preapproval process involves a thorough examination of the buyer’s finances, including their income, debt, and credit health. Buyers who get the green light from a mortgage lender typically receive a preapproval letter that’s valid for several months.

If They Could Cover a Potential Appraisal Gap

Most mortgage lenders require a home appraisal. If the property’s value is determined to be lower than the buyer’s offer, the lender won’t approve the full loan amount. Would the buyer be able to supply extra cash to cover the appraisal difference? If not, the deal could fall through.

2. Review Contingencies

Buyers can make their offers contingent upon certain requirements, and they can walk away from the deal if those requirements aren’t met. Here are some common contingencies in real estate transactions:

Inspection Contingency

This allows buyers to abandon the deal if they aren’t satisfied with the results of a home inspection.

Appraisal Contingency

The buyer has an out if the home is appraised for less than the sale price.

Financing Contingency

The sale is contingent upon the buyer being able to secure a home loan. If they aren’t approved for a mortgage, they can withdraw their offer.

Home Sale Contingency

This is for buyers who have to sell their existing home before they can buy a new property. That could cause a delay in your home sale.

When weighing multiple offers on your home, pay attention to buyers who are willing to waive certain contingencies. It could set the stage for a faster and smoother closing.

3. Pay Attention to Cash Offers

If your home is at the center of a bidding war, some buyers may be willing to pay cash to stand out from the competition. Cash buyers don’t need to rely on a mortgage lender to finance the transaction, which can help shorten the closing process by up to 60 days.

Also, pay attention to buyers who can make a larger down payment. This is the amount a homebuyer pays upfront, with the rest of the sale price financed through a mortgage. Buyers who require less financing may be more likely to get approved for a home loan.

4. Think About Your Needs

When deciding between multiple offers on your house, clarify what a successful home sale would look like for you. For example, you may be on a tight timeline and need to move relatively quickly. In that case, going with a cash buyer or someone who’s willing to waive contingencies can help you close faster. If your timing is more flexible, you might simply choose the highest offer from a buyer who’s already been preapproved for a mortgage.

You can also consider buyers on a more personal level. Let’s say your home is located in a great school district, and you get a competitive offer from a young family. They might stand out to you more than someone who’s looking to buy an investment property.

The Bottom Line

Comparing multiple offers on your home can be stressful. Ideally, you’ll find a financially prepared buyer who’s able to close with no major hiccups. An experienced real estate agent can help you evaluate offers and negotiate on your behalf.

If you’re planning to buy a new home, you’ll want your credit health to be as strong as possible. This can make it easier to get approved for a mortgage and secure a competitive interest rate. Get started by checking your credit report for free with Experian.

For any mortgage service needs, don’t hesitate to reach out to O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions for your home sale and purchase.