If you’re selling your home in a hot real estate market like Denver or Colorado’s Front Range, it’s likely that you’re going to receive multiple offers. While it may seem like a bidding war would be any seller’s dream, that’s not always the case. The highest bid doesn’t always mean it’s the best situation for the seller, and there are careful strategies to consider when managing multiple competitive home offers.
When your home is at the center of a bidding war, it’s vital to have support from an experienced real estate agent who can help you navigate the situation, minimize the stress and negotiate terms that work best for your unique circumstances. While there are many factors that go into choosing the best offer, here are three important things to consider in determining which is the best offer to choose:
1. The highest offer isn’t always the best offer.
It may be exciting to get a high-priced offer on your home, but whether or not the offer is a ‘good’ one comes down to more than just the price tag. Buyers can technically offer any amount of money that they want, and when multiple offers are coming in, buyers may become competitive and make an offer that will be a struggle for them to honor. Additionally, if the bidding war drives the offers up too far over the amount that the home is actually worth, the appraisal will come in at an amount that is less than the buyer offered, so they won’t get the funding and you’re back at square one.
2. Consider the contingencies.
The fewer contingencies in the offer, the better. If you have a great offer without contingencies, then that’s the ideal situation. Buyers may want to include a number of stipulations in their offer that can make the deal harder to complete, such as requiring that the home appraises for a certain amount, or has to pass an inspection, or that they must sell their home or get approved for a loan first. Your real estate agent should always do their due diligence to find out what contingencies the buyer needs, and negotiate on your behalf in the buyer’s letter to ensure you are protected in the event that the contingency doesn’t go through.
3. Closing time.
Sometimes buyers want to move in quickly, and sometimes they want to wait for a few months. If you can afford to wait, then it may be worth it to get the higher offer. However, if you need to move quickly, then the time to close should be a significant consideration in choosing your offer. If you want the most money possible and you think your home is worth the price, take the highest offer that makes sense to you. However, remember that sometimes it can be better to take a lower offer that gives you more of what you want, such as a quick closing, no contingencies or whatever else suits your goals.
Ultimately, there’s a big gap between getting your home sold and getting it closed, so it’s important to have an agent by your side that can ensure the offer is legitimate and the home appraises and closes quickly.
As a seller, having a real estate agent who knows how to handle multiple competitive offers on a home is imperative, as it can be easy to mismanage a bidding war. Your agent should help you review the offers critically one by one, and point out the terms that will matter most given the circumstances. Bottom line, don’t go through this process on your own. Having an experienced agent on your side who has expert knowledge on how to navigate these red-hot real estate markets will ensure you get the best deal on your home, and experience as little stress as possible throughout the transaction.