How to Handle Early Offers

Northeastern Ohio Podcast with Michael Kaim

If you receive multiple offers on your listing right after it goes on the market, don’t panic. Here are three key tips on how to handle this type of situation.

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What should you do if you get multiple offers within the first few days of listing your home on the market? There are three main points you should consider.

First of all, don’t panic. Don’t make a rash decision, and make sure you evaluate the terms of the offer. When making a decision like this, there are a few terms that you need to consider:

• The strength of the buyer. When you’re working with a buyer, make sure you look at the contract to see how strong their down payment will be. They’ll need to have a pre-approval letter, as well as passion for your house—you don’t want a buyer who will back out because they found something minor in the inspection. Don’t accept a “take it or leave it” offer.
• Look at the type of mortgage they’re getting. If they’re getting a government-backed loan such as an FHA, VA, or USDA loan, there’s a good chance they’re not as strong as a cash buyer because they have a financing contingency.
• What sort of contingencies are in the offer? Maybe they have a house to sell or they want to have you pay for certain inspections. If they have a house for sale, they’re not going to be as qualified as a buyer with a non-contingent offer because the contingent buyer will have to go through the same inspections and contingencies as you will with them.

Sometimes, the first or second offer that comes on the table is your best offer.

• Be aware of the closing costs. Closing costs are a consideration with more than half of the sales under $200,000. A lot of buyers are looking for seller closing cost assistance, and that will have an impact on your bottom line.
• What is the closing time frame? The closing dates are important. The house that you’re moving into will have a set closing date, so be sure to look at the closing time frame in terms of when your buyer can close on your house. You might want to have your kids in school within the next 45 days, so you have to negotiate those terms that make sense for you.
• Look at the possession period. Most people won’t be able to close on the other house they’re looking to buy until they have the funds from selling their current home. Give yourself three to four days after you close to move out.

Secondly, make sure to notify all of the Realtors of your multiple offer situation. Have your agent notify all other agents who have submitted an offer to put their highest and best offer on the table. Give them a deadline; the agents and the buyers will appreciate this. Thousands of dollars could be left on the table by not letting those buyers come up with a better offer.

Finally, don’t throw out potential offers. Sometimes, the first or second offer that comes on the table is your best offer. You don’t want to wait too long to accept one of those offers, in case you come back to them and find out those buyers have moved on

If you have any other questions, you can always reach out to us. Have a great day!