Have you put your home up for sale? If you’re lucky to have multiple offers coming in, you’ll be in an excellent negotiating position. But that doesn’t mean you hold all the cards. The laws of supply and demand will likely place bargaining chips in your hands. But like any market, there’s the risk of overplaying your hand. You’ll have to tread carefully. You wouldn’t want a potential buyer with the best offer to look elsewhere.
The Rules of the Game
You and your real estate agent are not obliged to tell the potential buyers anything about the offers. You also don’t have to provide proof that there’s, in fact, another offer. The game is based on the honor system, though. So, it’s best to avoid pretending to have another offer if there’s none. The mere thought of a bidding war can scare off great buyers. Besides, people may question your agent’s integrity if you go down with this strategy.
Tips to Handle a Bidding War
Here are some tips to help you deal with multiple home offers. This way, you don’t make unnecessary sacrifices. Ultimately, the goal is to walk away with the right price with the right terms, and the contract details perfectly intact.
- Remember That This Isn’t an Auction. The final agreed-upon purchase price is crucial. But this isn’t everything. Be sure to consider the earnest deposit amount as well. A large deposit may suggest that your potential buyer is committed. Depending on your circumstances, there are other ways to help you sweeten the deal. Perhaps you can waive certain home sale contingencies or let them offer something that suits your timeline. They might also be willing to give you the option to stay in your home for a set period.
- Request for a Mortgage Pre-Approval. Assuming you managed to play your hand well and now have multiple competitive offers. Ask yourself whether your potential buyer can truly afford your home. Out of desperation, expect that some buyers may offer something too good to be true. You can avoid this by insisting on a mortgage pre-approval instead of a pre-qualification. The latter only shows the buyer’s chances of qualifying for a loan with a rough estimate of their finances. On the other hand, a pre-approval is more comprehensive. It won’t guarantee that the buyer will get a loan, but it indicates that an application has already been sent. It means that a loan officer is thoroughly looking at their finances, such as income, credit history, assets, and debts.
Consider Cash Offers. Loans are generally the most common way to finance a house. But if you’re fortunate enough to obtain an all-cash offer, it’s worth contemplating. It could be lower than the other offers. Nevertheless, a cash offer with sufficient proof of funds lets you close the sale faster with fewer stumbling blocks. You can avoid the many headaches associated with conventional loan financing. These include the buyer’s loan qualification and the appraisal process. You also have to prepare for multiple contingencies due to possible changes in the buyer’s financial situation.
Dealing with multiple home offers is a delicate dance, from building hype around your listing to closing. You have to stand firm and negotiate the best deal. With The Whittington Team, we can help you sell your home on your terms. Call our office today at (858) 361-9090
in La Mesa, California, to make an appointment.