It is a fact, we are in a hot seller’s market, and one of the first things sellers say to us is “Will we receive multiple offers?”. This answer isn’t so black and white as there are a lot of factors that contribute to receiving multiple offers. Just because it is a seller’s market does not mean that every home listed will be bombarded with showings, and offers at or above the asking price. What we are finding is many sellers are pricing their homes above market value believing that a buyer will come along and pay their price. This just isn’t the case and causes homes to sit on the market for longer than necessary and sometimes sell for less than they should have.
Another factor to consider is the price point of the home. We are seeing a majority of home sales between $200,000 – $400,000.
So, will you receive multiple offers? If your home is located in a desirable neighborhood, you price your home right, listen to your Real Estate Agent’s advice on how to prepare your home to sell then it is very likely you will
receive multiple offers.
Below are some helpful tips on how to respond to multiple offers.
· Ask all potential buyers for their best offer. Going back to bidders for a second offer will weed out the less serious and can result in a higher selling price. But don’t let dollar signs blur your vision—this method may turn off some of your prospective bidders.
· Counter one offer and reject the others. You may receive an offer that is much better than the rest. This method allows you to focus on the most serious or worthy bidders. Countering gives them an opportunity to raise their price, giving you a fairer deal.
· Cash is king, but pay attention to contingencies
Cash is preferable because lenders are generally unreliable, and anything can happen with a loan. Also, there is usually no appraisal needed. That removes another unpredictable variable in the transaction.
But for all offers, cash or otherwise, make sure to review the proposed terms. An all-cash offer might come with unacceptable contingencies, which would make a buyer with a loan a better deal. Here’s what to keep an eye out for:
· Contingencies: While it’s generally a smart idea for the buyer to include contingencies in their contract, they create more opportunities for offers to fall through. If the buyers include a contingency for their home to sell, or if their offer hinges on mortgage approval, it might be worth skipping.
· Pre-approval: Buyers already pre-approved for a mortgage are almost (almost!) as good as cash. While pre-approvals do fall through, it’s much less risky than relying on a mortgage contingency.
· Appraisal requirements: One of the biggest issues we are facing in Washoe County is our appraisals. We simply do not have enough appraisers for all of the work. Also, with home prices continuing to rise, it becomes more challenging for an appraiser to justify the contract price. Unless the buyer is willing to make up the difference out of pocket, or the seller decides to reduce the price, your sale may fall through.
· Closing time: Depending on your ideal close date, the date that the buyer includes in their offer may have a big impact on deciding to accept their offer or not.
It feels great to be selling a popular home. Multiple offers can be exciting, but just like any other sale, they require careful consideration before you seal the deal. Be sure that your Real Estate Agent creates an estimated net sheet for each offer received. This will help you see each offer for what it really is. You may have two offers for $300,000 but one of them will net more money because of the way the offer is written. An estimated net sheet is an essential tool we use with our sellers throughout the selling process.
For more information, please call our Exclusive Seller’s Agent Claire Kirby 775-313-4967