Multiple House Offers: Consider These 7 Factors
Do you have multiple offers to buy your house and need to figure out which one is best? Congratulations! Often, this means your house is in demand, and you have some negotiating power. However, reviewing all the offers can be difficult, and it’s tough to determine which one will actually leave you with the most money at the end.
Many buyers have complicated contracts and various hidden fees. These make their offer far less compelling than the initial offer price you see. Here are a few factors to consider when reviewing your offers.
1. Closing Costs
Closing costs can be expensive, especially in more advanced real estate transactions. Many buyers will offer to pay them in full, others will split them equally, and others will put them all on you. Closing costs can be thousands of dollars, so it’s important to know how much you’re paying!
2. Title Insurance Fees
Most sellers pay title insurance when selling their house the traditional way. If an investor offers to buy your house and pay “all closing costs,” ask if they will pay for title insurance fees. Some investors may still add this in as a cost to you as the seller, which usually amounts to about 1% of your home’s value.
3. Realtor Commissions
Realtor fees can really eat into your profits when selling a house. These fees usually add up to 6% of the total sales price of your home. Even if you don’t use a realtor, many buyers will add a realtor fee in their offer, and you may not even know it. That’s an extra 3% deduction you’ll take on your final cash payout!
4. Concessions & Contingencies
Most offers come with a variety of contingencies to close, such as an inspection, appraisal, or financing contingency. Not only do these contingencies bring uncertainty that a buyer will actually close, but they also become great negotiating strategies for the buyer. Many buyers give you a higher offer and then come back to reassess the property. When they find new issues, they lower their offer and reduce your proceeds.
5. Close Date Flexibility
Close date flexibility is immensely important. It can be expensive to pay for two homes at the same time. Or even worse, you could have a gap in your housing, forcing you to deal with multiple moves and short-term rentals. Closing on the date you choose can reduce your home overlap, save you thousands in costs, and eliminate unneeded stress.
6. Service/Marketing Fees
Many online home buyers will give you an offer only to reduce it by a service or marketing fee that amounts to more than the cost of using a real estate agent. These buyers often try to hide the fees in your offer or lump them in with other costs. So proceed with caution when you’re “Selling to an iBuyer.”
7. Buyer Reputation
WE SAVED THE MOST IMPORTANT FOR LAST. Beware of the person or group that is buying your house. Do research to make sure they have an online presence and a good reputation with positive reviews to back it up. Many buyers will do everything they can to win your business. Then, at the last minute, they change their offer when it’s too late for you to do anything but accept it. It’s a terrible thing and why many investors get a bad reputation. Make sure you work with someone you can trust.
As you can see, many factors go into evaluating your offers and picking the best one for you. If you have multiple offers and need help understanding which one is best, we would love to help. Or, if you just have one offer and want a second set of eyes to make sure it meets your expectations, we can help you with that too. We want to ensure every family we work with maximizes the value of their equity and has the most pleasant selling experience possible.