What to consider when you receive multiple offers for your home

Getting multiple offers is every seller’s dream come true, and yet, when it happens, you might be daunted by the task of choosing the best possible buyer. Evaluating each candidate’s strengths and weaknesses is the only way to determine which one you should work with to close the deal. This often turns out to be the highest bidder, but not always. There are a number of other factors to consider beyond dollar amounts. Here’s what you should ask when weighing each offer.

ARE THEY PRE-APPROVED?

While pre-approval doesn’t guarantee that a buyer will obtain the necessary financing, it does indicate their seriousness. The pre-approval process requires hard evidence of the candidate’s financial capacity to pay the mortgage. If a buyer has gone through these steps, it shows both earnestness and a strong likelihood that the offer is solid.

WHAT ARE THEIR CONTINGENCIES?

The highest offer may come with numerous contingencies, some of which could cost you considerable time and money. You first have to weigh contingencies from a financial perspective. You may find that once you tally up the numbers, the offer isn’t as lucrative as it first seemed. Additionally, you may wish to consider the amount of work involved in agreeing to the contingencies. Accepting a slightly lower offer with fewer contingencies could very well save you a lot in the way of energy and effort. One particular situation to be cautious of is when the buyer’s offer is contingent upon the sale of their current home. If this is the case — and you don’t immediately run in the opposite direction — you may want to look into the details surrounding that sale and make an educated guess as to how quickly it might occur.

WHEN IS THE PROPOSED CLOSING DATE?

This won’t be much of a concern if timing isn’t an issue, but if you have a particular schedule in mind, it may play a large role in your choice of buyer.

HAVE A BACKUP

No matter which buyer you go with, it’s prudent to have a backup plan. Ask your second best buyer if they’re willing to accept a secondary position. Even if they don’t agree in writing, make sure your real estate agent stays in touch with them. The last thing you want is having to re-list, as you’re unlikely to get the same response the second time around.