Many properties listed today in SW Florida are receiving multiple offers. How would a seller know which offer to take? Today we offer our selecting best multiple offer tips for sellers.
Selecting Best Multiple Offer
It is logical to assume the highest price would be the best offer, but that may not always be the case. Of course, a seller wants to maximize how much they can get out of the home. Of equal if not greater importance is the likelihood the buyer can perform. It does no good to accept a higher offer that is unlikely to close.
It is important that the listing agents knows all facts about the home. For instance, some homes may not qualify for an FHA or VA loan. There could be some insurance uses, or property condition issues imposed by the lender. Some buyers may not be able to cure deficiencies placed by their lender, and it has nothing to do with the buyer.
Purposely Bidding Up Home to Win Negotiation
Some buyers purposely drive up the price with their offer banking on the fact the lender will knock it back down with the appraisal. If you are selecting best multiple offer based solely on price, you might be surprised later if the home does not appraise. A buyer may have the option of buying the home above appraised value provided they are putting down enough to cover the difference for the loan they have applied for.
For instance, let’s say a buyer is putting 50% down. Chances are they are going for a conventional loan needing only 20 or 25% down. Because they are putting more than that down, they already have the difference if the home does not appraise by a little bit. Now if the home only appraises at 50% of purchase price you would have a problem because the buyer would not have anything down. Banks base their loan to value ratio off the value, not the purchase price.
Obviously, an all-cash buyer does not have appraisal worries, unless they add an appraisal contingency. In that case, the home must appraise for purchase price or buyer is not obligated to complete the purchase.
Remove Appraisal Contingency
Back in the foreclosure crisis buyers were bidding up foreclosure deals and getting financing for the new purchase. The seller (foreclosure bank) wised up and started adding language that if home did not appraise the buyer would be responsible for the difference. This basically stopped buyers from outbidding each other just to score the deal. Most of those buyers could not pay the purchase price because the new bank would not lend on it. The seller would have been better off taking a lower bid with a buyer that could actually complete the sale versus buyers that could not.
The condition of the home may influence which buyer’s offer to take. Knowing that a certain type of loan may not accept certain property conditions may save you from going down the road with the wrong type of loan. All of this takes knowledge and experience, and therefore it pays to hire the best Realtor you can find. Hiring the wrong Realtor can cost you thousands of dollars, even in a hot market.
Full-time agents that have thousands of deals for experience have seen a thing or two, and therefore know how to deal with issues before they become problems. And when problems do arise, and they inevitably will, possessing that knowledge and experience pays off in solving the problem.
The bottom line is an experience agent is more likely to get you top dollar and keep your deal together than an inexperienced agent, no matter how much determination they have. There is just no substitute for experience. This is not the market to experiment with an inexperienced agent.
If you have a home to sell, call Brett or Sande Ellis 239-489-4042 Ext 4. Brett and Sande have sold over 5,000 homes, and we know a thing or two. If you are looking at purchasing, our team of buyer agents work directly with Sande and Brett. Our knowledge helps you structure the best offer. Buyers can search the MLS at www.LeeCountyOnline.com Sellers can visit www.SWFLhomevaules.com to get your home’s value online instantly. Let us know if how we can help you!