Choosing between multiple house offers in Newburyport Ma when you are the seller. I was just in the situation and we had six offers to choose from. My sellers had their choice. So, did we choose the one with the highest offer? No, we did not, and here is why.
Things to consider before selecting an offer
We considered all the terms people offered and we put together a spreadsheet so we could compare apples to apples. The terms we considered were: price; were the buyers asking for a closing cost credit; asking us to pay for a home warranty; what was the timeframe of the closing, meaning four weeks versus six weeks; and we looked at the financing, how much money were the buyers putting down, with no money down? 10%, 15%, 20%. We considered all of those things, because qualifying for loan at 100% versus a loan at 80% is much harder.
We also looked at if the offer was fully underwritten, meaning that the buyers were already approved all the way through the loan process and all that had to be done was to attach an address to the buyer. Also if they had a house to sell and if they were going to ask for any home repairs after home inspection. Additional contingencies where if they said that they wanted the house to appraise at or above the purchase price.
Lets take all of these considerations one at a time when you are selecting from multiple offers
Price of the Home
All sellers want the most amount of money for their home. Buyers purchasing a property with cash must know the market well and put a couple of safeguards in place so, a fair price is paid for the property. Safeguards are in place in Massachusetts with a 3rd party independent appraisal should the buyer be purchasing the property with a mortgage. This is important for the seller to understand these values as well because the bank – the underwriters (several departments and approvals are required), and the appraiser will render a decision on the value of the property and what the buyer has offered. Then a business decision will be made as to whether or not the bank wis willing to fund the mortgage based on these ratios. So yes the price is directly tied to the appraisal and the appraisal is based off the recently sold properties, within the last 3 months, of similar style, location and features.
While buyer may have great jobs and a good downpayment sometimes buyers may ask the seller to pay for the closing costs or part of the closing costs. This can happen for many reasons. Sometimes the buyers see things in the house that need to be repaired or they want to update immediately and they want to preserve their cash to remedy the situation sooner rather than later. Other times they have enough money for the down payment but don’t have enough for the closing costs. Other times the buyers just want to negotiate a good deal. No matter what the reason the bottom line as it hits the seller dollar for dollar so understanding the net proceeds is important when evaluating an offer.
The Winning Offer
But in the end, you know what offer won? The buyers that wrote the winning offer wrote a wonderful, heartfelt letter explaining why they loved the home. And when we narrowed it down to the top three, we ended up choosing not the one with the highest price, but with the strongest financing, and that tugged at the seller’s heartstrings.
So, if you are thinking of selling and you want to understand how to choose between multiple house offers for a house, details of potential terms, I would love to help you and get your home sold quickly and for the highest price.