Comparing multiple offers can be a confusing process for sellers. The tendency is to focus strictly on price, but that may lead to problems. There are a variety of different components to an offer that sellers may consider in order to identify the best offer. This blog contains an overview of evaluating multiple offers on MA listings.
An Overview Of Evaluating Multiple Offers On MA Listings
Conditions of the Purchase
It is normal for contingencies such as an inspection and mortgage approval to appear in an offer. Sometimes special contingencies are added by buyers. Contracts with fewer conditions are more likely to close and to do so on time. Furthermore, some conditions are more troublesome than others and can be influenced by the activity in the real estate market.
There is a dramatic difference between a pre-qualification and a pre-approval, particularly when comparing multiple offers. A pre-approval is normally granted after a lender confirms the credit for a buyer. A pre-qualification involves no such verification. Pre-approved buyers are, therefore, better positioned to get final approval for a loan. Sellers will risk valuable time from buyers who cannot get financing and back out of a purchase. The type of mortgage should also be analyzed since some types of loans have strict guidelines on the buyer and property, or generally take significant time to process.
Deposits reflect the good faith of a buyer. It also protects a seller from a buyer backing out from a purchase for a reason unrelated to contingencies. Lastly, the amount of earnest money can reflect financial stability. The amount of deposits must be carefully considered in comparing multiple offers for these reasons.
Looking Beyond Price
Sellers should not make price the primary consideration when comparing multiple offers, particularly if closing promptly is a concern. Delays can be costly and therefore affect the net earnings from the same of a property. Furthermore, a home that comes back on the market after a deal falls through may sell for less since buyers have the impression that something must be wrong with it. An experienced real estate broker can help you carefully consider all the terms of contracts and accurately compare them. This blog with an overview of evaluating multiple offers on MA listings was prepared by Bill Kuhlman at Kuhlman Residential.