When you’re selling your home, it’s crucial to carefully evaluate each offer you receive. Here’s a comprehensive checklist to help you compare offers side by side and determine which one provides the best overall value and meets your specific needs.
1. Offer Price
- Is the offer at, above, or below the asking price?
- Higher offers are often attractive, but consider the full package, including contingencies and buyer strength.
- Does the offer meet your financial expectations?
- Keep your bottom line in mind, including any proceeds after closing costs.
2. Financing Type
- Cash Offer vs. Financed Offer
- Cash offers are often more reliable and have fewer obstacles, resulting in a quicker close.
- Pre-Approval Status
- Is the buyer pre-approved (not just pre-qualified)? This signals a strong, serious buyer with financing already lined up.
- Type of Loan
- Conventional loans are generally preferred over FHA or VA loans, which can have more stringent requirements and slower timelines.
3. Contingencies
- Sale Contingencies
- Does the buyer need to sell their home before they can buy yours? This could delay or jeopardize the sale.
- Inspection Contingencies
- Some buyers may request an inspection contingency, allowing them to negotiate repairs or back out if issues are found. Weigh the risk and your willingness to negotiate.
- Appraisal Contingency
- If the home does not appraise for the offer amount, will the buyer cover the difference? This is crucial in competitive markets where bids may exceed appraised value.
4. Closing Timeline
- How soon can the buyer close?
- A quicker closing may be appealing if you need to sell fast, but ensure that the buyer can meet the timeline.
- Is the timeline flexible for your needs?
- If you need extra time to move or close on your next home, a flexible buyer may be preferable.
5. Earnest Money Deposit
- How much earnest money is the buyer offering?
- A higher earnest money deposit shows the buyer’s commitment and seriousness. It also provides you with more protection if the deal falls through.
- Is the deposit non-refundable after contingencies are removed?
- A non-refundable deposit strengthens the buyer’s offer.
6. Buyer Strength and Intent
- Has the buyer’s lender or agent communicated their qualifications?
- Strong, well-qualified buyers have less risk of financing issues.
- Is the buyer motivated or flexible?
- Buyers willing to accommodate your needs (whether it’s timing, terms, or other conditions) could be worth considering, even if their offer isn’t the highest.
7. Repairs or Concessions
- Is the buyer asking for repairs or credits upfront?
- Buyers requesting extensive repairs or concessions may be less desirable, especially if other offers have fewer demands.
- Are you willing to negotiate repairs after the inspection?
- Be clear about your flexibility on this point.
8. Additional Terms or Conditions
- Does the offer include unusual requests?
- For example, does the buyer want certain items included in the sale (appliances, fixtures)? Are they asking for other unique terms?
- Lease-back options
- If you need time to move after the sale, a buyer offering a lease-back option might be a strong contender.
9. Net Proceeds Calculation
- What will you actually net after closing?
- Consider any closing costs, commissions, and other fees. An offer might seem high, but after all costs are factored in, it might not be as lucrative as it first appears.
Recommendations: What Makes a Better Offer?
Cash Offers with Minimal Contingencies: Cash offers generally close faster and with fewer complications. If the cash offer is close to your asking price, it could be the safest and smoothest option.
Strong Financing and Pre-Approval: If a buyer is using financing, prioritize those with strong pre-approval letters and a higher earnest money deposit. Conventional loans tend to come with fewer restrictions.
Limited Contingencies: Offers without sale contingencies or with waived inspection contingencies indicate a buyer who is committed and ready to close quickly.
Flexible Closing and Terms: Buyers who align with your preferred timeline, or who offer flexibility (like lease-back options), can provide significant convenience.
High Earnest Money: A larger deposit shows a buyer’s confidence and increases your security if the sale falls through.
Consider Overall Net Proceeds, Not Just Offer Price: A slightly lower offer with fewer contingencies and quicker closing may net you more in the long run than a higher offer with many conditions attached.
By using this checklist, you can confidently compare offers and choose the one that best meets your needs, ensuring a smooth and successful sale.
