How to Choose Between Multiple Offers on Your Waterloo Region Home for Sale
In a hot real estate market, which is the current state of the market in the Waterloo Region as we head into 2022, because there aren't enough properties for sale to match demand, many sellers can expect multiple offers on their Waterloo Region home for sale. It's a pleasant problem to have, for sure, but deciding between multiple house offers can be challenging.
Just because you do get several offers does not mean that they will all be great offers. Taking the time to evaluate them all properly - and preferably with the help of your real estate agent - will help ensure that you choose the offer that's the best one for you, not just in terms of pricing, but also timing, the number of concessions you might have to make and more.
With all of this in mind, here's a look at some basic wisdom to keep in mind when it comes time to start sifting through those offers.
Start with Price, But Don't Stop There
The offer with the highest bid attached will obviously catch your eye first, especially if it is higher than your asking price. However, the top bidder may not be able to obtain a mortgage in the required amount, especially if it is over asking.
So, in addition to the sum offered, have your real estate agent, go over the conditions of the proposed contract as a whole. Consider how much money the buyer is willing to put down. A larger down payment — and hence a lower home loan — will increase the likelihood of the buyer qualifying for a mortgage.
Compare and Contrast Contingencies.
When buyers make an offer, they frequently include a set of conditions that, if not met, allow them to back out of the transaction without penalty. These contingencies could include getting a mortgage approved, the home passing a home inspection that the buyer orders, and ensuring the home appraises for a particular amount.
When selling your home, it makes sense that contracts with fewer contingencies are preferable because the buyer will have fewer opportunities to back out. You can't always expect offers that have no contingencies, but it is fair to say the fewer there are the better.
Take Into Account How the Buyer Will Be Paying for Your Home
You don't have to worry about buyers qualifying for a mortgage to buy your Waterloo Region home when they pay cash. That suggests the deal is more likely to go through. You should however require potential buyers to provide documentation demonstrating that they have sufficient money and assets to pay in cash as stated.
However, most buyers will require a mortgage, and if this is the case, check whether the buyer has been preapproved for a home loan. A preapproved buyer's offer is more powerful than one from a buyer who hasn't secured financing. Most real estate agents do insist that those they show homes to have mortgage preapproval before they begin, but that is not always the case.
You and your Realtor should also think about the lender a buyer intends to utilize for their mortgage. It's more promising if the lender is well-known in your area and has a record for closing deals fast than if the buyer chooses a lender you've never heard of. Your real estate agent, if locally based, should know which local lenders have the best track record.
If you don't know who the lender is, do some research or ask the buyer for further details.
Inquire About the Buyer's Ability to Close Despite a Low Assessment.
An appraisal will be ordered by the buyer's chosen lender. If the appraised market value is lower than the offer price, the buyer will be required to make up the difference with cash on hand. You may be best served by choose a borrower who can show that he or she has enough money saved to cover a low assessment, especially if their offer is over your original asking price.
Consider Closing Timetables
If you need to sell quickly, you might prefer a buyer who has been preapproved for a mortgage and can close in a few weeks. However, if you require additional time, such as the time to find your next home, you may prefer a buyer that is willing to work with you.
In the aftermath of the pandemic, purchasers frequently offer to let the seller stay in the home for up to 60 days after closing. Although purchasers sweeten their bids by not charging rent in the hottest markets, it's known as a rent-back.
Consider Any 'Buyer Extras' On Offer
In an attempt to differentiate themselves from rival offers, some purchasers may offer to cover some of your closing fees. Another can make an escalation offer, promising to outbid another bidder by a specified amount. These kinds of sweeteners can tip the scales if you're weighing numerous offers with identical pricing and contingency terms.
It's wonderful to get multiple offers on your home when you're selling it. You can successfully handle numerous offers on your house and sign the best contract by analyzing all aspects of the bids, including price, contingencies, and ability to close. Your real estate agent can be a huge help here too.
Often, when multiple offers are expected, setting a specific date for considering offers can be very helpful for everyone involved. Doing so will allow potential buyers to compose their offer properly, and it will allow you and your agent to plan a specific time for that serious meeting when you will sit down and go over the offers together.
It's also a big stress reliever for everyone, too. Buyers will know exactly when they can expect an answer, and sellers will not have to deal with interrupting their already busy schedules by undertaking lots of short offer review sessions, and a set offer date will also allow their real estate agent to ensure they will present to help.
Considering buying or selling a Waterloo Region home? Let Team Pinto use their huge local real estate experience and expertise to help you. Contact the award-winning Team Pinto here, or book a free Zoom consultation to discuss your unique Waterloo Region real estate needs here