you have multiple offers on your hands, you earn the right to dictate
favorable terms and conditions of sale for yourself. Buyers know
that you have a hot property, and the pressure is on them to please
you. Whether you have 3 offers or 33 lying on the kitchen table,
you face the same dilemma: selecting the best offer.
isn't the sole criteria. The highest offer is far from best
if it's riddled with dubious escape clauses, totally out of synch
with your time frames, or made by someone who's a week or two
away from declaring bankruptcy.
buyers against each other is a two-edged sword. On the plus
side, a bidding war can catapult the ultimate sale price over
your asking price. You may, however, make a major mess of things,
if you're not careful. You may scare off all the buyers by making
absurdly high counter offers. Worse yet, you may convert multiple
offers into multiple lawsuits by inadvertently ratifying more
than one offer.
As a seller in a sellers' market, follow these tips to avoid snatching
defeat from the jaws of victory:
like a lender. In a strong sellers' market, spirited buyer
competition often pushes prices to new heights. Lenders usually
support higher prices when they reflect an overall market trend
and when the mortgage isn't an excessively high percentage of
the purchase price. You determine that percentage, called the
loan-to-value ratio, by dividing the loan amount by the purchase
price. From a lender's perspective, the higher the loan-to-value
ratio, the greater the risk that a buyer will default on the loan.
So, as a rule, the lower the loan-to-value ratio, the better the
chances of getting loan approval.
issue more than one counter offer at a time. When faced with
multiple offers, you have four options -- accept one, counter
one, counter more than one, or reject all offers. If you counter
several offers, you may inadvertently end up in contract to sell
your house to several different buyers. The one sure way to avoid
this scenario is to follow this rule: Counter only one offer at
buyers carefully. When you question agents about their buyers,
scrutinize each purchaser's creditworthiness, motivation to purchase,
and deadline for when they must complete the transaction.
you have any doubts about the buyers' financial qualifications,
get their permission to contact the lender directly to resolve
your questions before accepting or countering their offer.
Buyers who have been pre-approved for a loan by a reputable lender
have a "Good Borrower Seal of Approval" -- as long as
the mortgage they need to buy your house doesn't exceed their
pre-approved loan amount.
as much attention to terms and conditions as you do to price.
Sometimes, a lower price beats a higher one. For example, when
you evaluate offers, seek terms that fatten your bottom line.
If a buyer offers to purchase your house "as is," you
don't have to pay for corrective work or worry about getting stuck
reducing your sale price because of a bad inspection report.
you need a quick sale, the best buyer is the one who can close
fastest. Then again, the best buyer may be the one who'll
let you rent your house back after the sale if you need a place
to stay until the sale of your new home closes. Remember: Price
isn't everything if you have other, more compelling needs.
conflicts of interest resulting from dual agency. Dual agency
occurs when the same agent or real estate broker represents both
buyer and seller. If your listing agent also represents one of
the people making an offer to buy your house, that agent has a
conflict of interest, plain and simple. Most real estate firms
have procedures to handle dual agency according to state real
Next Step: Making a Counter Offer
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