Evaluating offers on your home

In this sellers market, it is not uncommon to have multiple offers for your home listing. Agents reported that 18% of all sales in Wake County so far in 2024 had competing offers. That reported number was 17% in 2022 and 19% in 2023, so it's fairly steady in our market.

If you get more than one offer, how do you decide which one is best for you to sign? Should you just accept the one with the highest price? There is no one size fits all answer, but here are a few things to help you evaluate wisely. 

Focus on your goal.  

The highest offer price may not be the best offer for you. A great realtor will have talked to you about your goals for this sale before you signed a listing agreement. Likely the most important factor in evaluating offers will flow from your primary goal in selling the property. 

If your goal is to sell quickly, then evaluate offers primarily on their proposed closing date. Hopefully your agent made your preferred closing date clear to buyers so that most offers you receive match that date.

On the other hand, if your goal is convenience, first look for offers that give you flexibility and ease of process. Are they offering for you to keep possession after closing to make moving to your new home easier? Are they offering to waive or limit any repairs on the home? 

Obviously, if max value from your home is the most important thing, start with offers with the highest numbers and compare them on how well they meet your secondary goals.

Due Diligence is critical

In a highly competitive market, to stand out in the offer process buyers are increasing the due diligence fee they are willing to pay. The due diligence fee is paid directly to the seller and is at risk for the buyers from the moment the contract is signed. Higher fees mean the buyer is less likely to terminate the contract (which they can unilaterally do during the due diligence period) and undercuts their ability to negotiate for repairs or improvements. If losing $20,000 or $30,000 to escape the contract, few buyers will be willing to terminate. However, if they only have $1000 at risk, it’s a lot more likely. 

Sellers need to be intimately acquainted with the due diligence fee and process to make wise choices on offers. You need an agent who can give you insight on what’s happening in the market today, not what was common even 6 months ago as the market is shifting rapidly. 

Pre-approval 

Too often a buyer’s financial qualifications are skipped in the evaluation process, but that can hurt sellers. Buyers with strong qualifications and larger down payments are more likely to complete the purchase. Buyers who are not well qualified could fail to close on the home due to an interest rate hike or a low appraisal. Sellers do not want to sign an offer only to have to go back on the market in a few weeks because the buyer they chose ultimately could not buy the home. Your realtor should help you evaluate the likelihood of the buyer being able to close on your home. 

Red flags

Many sellers are unaware of the common “red flags” in offers that can signal that a contract may not be the right one for them. 

Some buyers can’t buy your house until they sell theirs. A contract requiring the sale on another home exposes the seller to all the risks of this buyer, but also all the risks associated with the buyer of the house they are selling. A careful analysis of that other transaction should be done before you sign an offer predicated on another transaction.

Appraisals are a loan requirement for buyers, but can create problems for sellers indirectly. If the buyer offers above market price for the home, and it doesn’t appraise for the contract price, their lender will only lend them money based on the appraisal opinion of value. If they don’t have the cash to make up the difference, they may be unable to complete the purchase. Beware of high offers where the buyer could get burned by a low appraisal. 

Beyond those concerns, buyers often add addenda to contracts. They can make the offer only valid for a few hours, or require the seller to include personal property you may not want to sell (washers, dryers, refrigerators, pool tables, etc). Worse yet, they could require specific repairs the seller does not want to make to the home. Even simple things like being required to replace a window could delay closing for weeks.

Trusted advice

The best way to evaluate multiple offers is with experienced and expert guidance. Selling your home yourself brings massive risks, and an agent with a great marketing plan and expertise can help you avoid the pitfalls and choose a great offer.

If you need expert advice on selling a home, reach out to us at 919 Realty Group today.