You’ve put the house up for sale and the offers have started to come in. How do you go about choosing the best offer and how do you know which offer is the best? What can you do to make sure a good deal doesn’t slip right through your fingers? Believe it or not, price isn’t the only factor to consider when choosing an offer for your home for sale. There are many more factors to consider like timing, terms, contingencies and financing. Any one of these factors could cost you time and money if you are not careful. So when you are deciding on the right offer, you have to hedge against various risks. And in the event that you receive multiple offers, a seller’s dream, you will want to make sure you and your real estate agent have a strategy to use that leverage to get the highest price with the best terms for your home.

1. Communicate your priorities to your agent.

Do you need to close by a certain date? or do you need a little extra time to move out of your home after closing? Before you list your house, we will discuss your priorities and timeline, which will help determine the right offer depending on the factors that are most important to you and your individual situation. For example, If you need to close quickly because of a job relocation or divorce, speed might be a top priority.

2. Understand contingencies in the contract and determine their risks.

Real estate contingencies in a home purchase contract are "walk-away" clauses that allow the buyer to back out of the contract and get their earnest money back if certain conditions aren't met. Buyer’s have lots of ways they can get out of a deal, but sellers have very few. So when you’re deciding on the best offer for your house, take a close look at the contingencies that the buyers penciled in, meaning all the steps that have to occur before a seller can get paid.

The most common contingencies include the home inspection, buyer financing, and property appraisal—which all protect a buyer in the event that major defects with the home come to light or the house doesn’t appraise during closing. Some contingencies, however, are riskier for sellers, such as an offer that is contingent upon the buyer selling their existing home. If you receive an offer that has too many contingencies, look at it as a way to help you narrow down your pile. Because the fewer hurdles you have to tackle when it comes to an offer, the better for you, the seller—even if the listed dollar amount is a good one.

3. Should you take the first offer that comes in?

Determining whether the first offer will be your best offer can be tricky, especially in a hot and competitive market. If you get an offer right away, you might feel like the home wasn’t on the market long enough and that you could get a better deal. Typically, I do recommend that you home have at least 3 days on the market before you accept an offer. However this is not a hard fast rule. I have had sellers “wait for something better” and they have been disappointed. The first 2 weeks that you home is on the market is the time your home will get the most traction from potential buyers, after that, your home will begin to get less and less attention and may become “stale” on the market. Buyer’s may take this as an opportunity to send in a “low ball” offer as they now know they will have an upper hand in negotiations since you as the seller don’t have any other options. So don’t get cocky and opt to wait around for something better, simply for the sake of testing the market to see what you can get. You should weigh every offer seriously, and the ones that come in early may have very motivated buyers behind them who are ready to go. I'm not saying you should take the first offer that comes your way, just make sure you don't turn down a good thing.

4. Keep your emotions in check

When it comes to any business transaction, like accepting, rejecting, or negotiating an offer for your home, it’s critical that you do your best as a seller to keep your emotions out of the process; otherwise, the consequences could be costly to you. Do your best to look at the home, market, neighborhood inventory, and offers with clear eyes, and avoid letting a great offer go because of your emotional attachment to the home.

5. Know what you are looking for in a strong offer.

Besides taking that first offer seriously, how can you gauge the quality of other offers you get?

Look at the buyer’s financial strength. Di they have a mortgage pre-approval? Are they offering a large down payment? Or are they paying cash for the home? The buyer’s financial strength is a very important factor when reviewing offers,. I always make sure there is a letter of qualification from the financial institution and mortgage lender and take note if the buyer is pre-approved or just pre-qualified as there is a big difference! Many times I will even call the financial institution directly to make sure it is a dependable offer.

Are there any buyer’s concessions? Is the buyer requesting that the seller pay for their closing costs or requiring repairs to be completed before closing?

Some buyers will waive the inspection period. This is great because that is one less hurdle overcome before closing. Others might ask the seller to pay a chunk of their closing costs, this money comes right out of the seller's pocket and reveals may not be in a great financial position and might not have the funds to pay closing costs.

What is theTimeline and Flexibility of the buyer? Can they be flexible with the move in date and date of closing? Are they able to work around your needs as the seller?

Securing a buyer who is willing to be flexible on a closing date can be important particularly for sellers who haven’t yet secured a new home. This gives you more security that you will not have to close before you have somewhere to go! Some buyers will also allow you to do a rent back which means you get to live in the home for a certain amount of time after closing to have time to pack and move.

7. Larger deposits = stronger offer

If you’ve narrowed down your stack by now and all offers remaining are fairly equal in price, concessions, flexibility, and scope—another factor you can use to determine the best offer is the earnest money deposit. If everything else is equal and one offer gave a $2K deposit and the other one gave a $10K deposit, to me the latter is a lot better because it shows their commitment to buying the home and it's also harder for a buyer to walk away from the deal.

8. Leverage a bidding war to get the highest price and best terms

A bidding war will give the seller additional leverage to negotiate price and terms. Make sure you have an agent who knows how to negotiate with interested buyers to get you the best deal. As a Certified Real Estate Negotiator and an experienced agent I have "been there done that", so whatever your reason for selling and your needs for the future, you can find comfort knowing the agent has your best interests at heart—and rest assured you won’t let the best offer slip away, or settle for a deal you’re not happy with.

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