When you sell your home, how do you know which offer is the right one to choose? First of all, keep in mind that it’s not always just about the price. Obviously, if someone offers list price or above, that will grab your attention. There are, however, many other factors that you should consider.
First of all, evaluate the contingency periods that the buyer includes in the offer. The buyer will have conditions that need to be met before they move forward with or walk away from the agreement.
Typically, there are three types of contingencies:
- Inspection contingency, which details how long they will take to evaluate the property’s condition.
- Loan contingency, or how long it will take the lender to approve their loan.
- Appraisal contingency, which means that the property must appraise for the price the buyer is offering.
Shorter contingency periods tend to indicate that the buyer is serious about purchasing your home.
You should also consider the value of your home. If the market is bringing buyers who are willing to offer a price on the property that the appraisal won’t support, you may need to think twice about that offer. However, if a buyer agrees to purchase the home regardless of the appraisal, that can be really great for you as a seller.
Next, look at the closing costs. There are certain costs the buyer is responsible for and a few you are responsible for as well. Some buyers may agree to pay the closing costs that you would normally be responsible for.
Finally, consider the time needed to close. When a cash buyer makes an offer, they can close fairly quickly because they don’t have to worry about the loan contingency or the appraisal contingency. You may be able to close in two weeks, which can definitely be beneficial. On the other hand, you may need to stay in the property after close of escrow and pay the buyer rent. In any case, make sure the closing time frame matches your needs.
Clearly, there are many factors to consider before you accept an offer on your home. If you have any questions, give me a call or send me an email. I would be happy to help you!