Most home sellers can only dream of a bidding war on their houses. But in a brisk market, sellers with an attractive home in a great location can find themselves entertaining multiple offers. Is the highest offer always the best offer? Not so fast.
Do your homework. At the very start, meet with your agent to research home sales in your market. Are homes selling within a few days of listing? How are prices? Are sellers getting at or above asking price? Armed with data, set the price for your home with confidence.
Start out right. Setting the list price for your house is perhaps the most important step in home selling. Start too high and it could languish on the market, forcing later price reductions, which never look good. Price too low and you’ll get a quick sale, but with the nagging feeling that you could have gotten more.
Getting multiple offers most often occurs in a robust selling market when the list price is slightly below the average price for your type of home. At that price point, multiple offers can quickly push you above your asking price.
Some basics must be in place, however. Your house must be in good repair, cleaned and staged, and well marketed. The days are gone when an MLS listing and a sign in the yard will sell a house for top dollar. A dedicated online page featuring the home, professional pictures, open houses and agent tours are all good strategies.
Offers in hand, how do you choose? It isn’t as simple as the highest bidder wins. The quality of the buyers themselves is crucial. When selecting among offers, the buyers need to have their money in order: a preapproved loan and a healthy down payment make mortgage processing go smoother.
A possible glitch: if the home doesn’t appraise well. The buyer is then left with two choices: coming up with more money out of pocket or asking you, the seller, to lower your price. In other words, multiple offers are great, but the sky is not the limit. The lender’s appraisal could bring you back down to earth.
Another area to consider: contingencies. In a bidding war, buyers are advised to make their absolute best offers. From the seller’s perspective, that means few, if any, contingencies. Sale offers contingent on the sale of the buyer’s home may be rejected outright by the seller. In the end, the best offer is the one that balances best price, contingencies, and likelihood of closing problem free.