While it’s tempting to immediately accept the highest bid a buyer offers, several factors should guide your decision, including buyer concessions, financing reliability and your personal timeline. Being strategic about your choice ensures you’ll not only get the best price but also experience a smooth and successful sale.
“One is whether the buyer is requesting concessions of any kind,” Powell said.
Powell explained that sometimes, buyers will increase their offer price and then ask for closing concessions. She said that the sales price on the offer will look great but granting those concessions cancels out the additional profit.
“In light of the recent NAR settlement, buyer requests for concessions from sellers are likely to become more prevalent in the coming days, especially on properties where the responsibility for buyer agent commission rests on the buyer,” she explained. “Understanding and being able to strategically negotiate concessions is a key factor in comparing multiple offers.”
How the Home Will Be Purchased
Powell said a second item that can elevate one offer over another is how the home will be purchased.
She said, “If a buyer is using financing, are they fully pre-approved by their lender? How is their lender’s reputation for closing on time and for consistent communication? If it’s a cash buyer, do they have an official letter from their banker verifying their stability as a customer and offering proof of funds? The best offer in the world is useless if the buyer isn’t able to close.”
Logistics
“One other item to consider when comparing multiple offers is to weigh how well the terms meet the seller’s logistical needs,” said Powell. “Is the closing date convenient for the seller? If the seller needs to close this home to buy another one, a strong offer is one that can sync with the seller’s timeline so they receive funds in time to close the next home.”
How To Identify the Best Overall Offer
Powell said that one important aspect of identifying the best offer that’s often overlooked is vetting the buyer.
“This includes fully researching their proof of funds, financing approval, lender and agent,” she explained. “The offer that nets the seller the most money on paper could quickly become their worst nightmare in this world of scams, fake lender letters and bad actors. Achieving a smooth transaction means researching the full buyer team, and whenever possible, choosing to work with lenders and agents who are known for their professionalism and ability to close well and on time.”
How To Negotiate Effectively With Multiple Buyers
“When inventory is low and you have something several buyers want, be strategic so that you can get the best possible result,” Powell recommended. “One tried and true option is to indicate to each buyer that multiple offers have been submitted, and invite them to submit their highest and best offer by a deadline of your choosing.”
However, she cautioned not to stretch out the deadline too far or the buyer is likely to move on.
“But do give them enough time to reconsider their position,” she said. “Chances are they will come back with a much stronger offer and you’ll enjoy a much higher profit at closing.”
Common Mistakes To Avoid
Powell said that the biggest mistake a seller can make is to go straight for the offer with the highest sales price.
“Sometimes a lower offer might actually net the seller more,” she said. “The buyer might prefer to keep the sales price lower, but they add in other items of value to stay competitive with the other offers, such as paying for the seller’s taxes and escrow fees or offering a temporary leaseback at no charge to allow the seller more time to move out.”
Powell explained that another common mistake is not factoring in appraisal.
“Financed offers, and many cash offers, require an appraisal,” she said. “The property must make value at the contracted price in order for the sale to go through, unless the buyer has also offered to pay any amount beyond the appraised value in cash, and if this is the case, then it’s important to confirm those extra funds when you vet the offer.”
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