Yes, the housing market has started to cool. Even so, in most places throughout the country, sellers find themselves in an enviable position. With housing inventory still tight and prices still high, odds are you might find yourself entertaining multiple offers on your house. In fact, a recent National Association of Realtors analysis found that there were approximately 2.8 offers for every home listed in July 2022.
While we all love options, and a bidding war over your listing is certainly flattering, this situation can be head-spinning for a seller. Is the highest offer always the best offer? Here, real estate agents offer advice on how to compare potential buyers, and what to consider before choosing a winning bid.
With multiple offers, does the highest bidder win?
“The first thing people go to is price, but that can be very short-sighted,” says Kimberly Allard, a broker and Realtor at Century 21 Professionals in Massachusetts. “Somebody can offer you whatever [amount] they want, but if they can’t support how they’re going to fund it, it’s essentially a useless number.”
Price matters, of course, but a homebuyer’s offer is a lot more than just a number. When you sell your house, there are contingencies, timelines and financing to consider. A qualified real estate agent can help you evaluate all of the factors in play, Allard says. Here are some questions she recommends asking about every bidder:
- What percentage of the purchase price is the loan?
- What type of loan is it?
- Are they waiving any inspections?
- Are the dates of the contingencies tight?
- What is the requested closing date?
- Does the buyer have a home to sell?
- What is the amount of their escrow deposit?
- Is the offer legible and on state-approved forms?
- Are all the required disclosures attached?
Clearly, there’s a lot to think about beyond who’s offering the highest purchase price. Let’s look more closely at some of the most important factors when sifting through multiple offers.
A home sale generally comes with various contingencies, clauses that let either party back out if certain conditions aren’t met by a specified date. Most offers include an inspection contingency, for example, which lets the buyer get the house inspected — and potentially back out if they find any major problems.
A lot hinges on the applicable timeframes. “To sellers, the contingency timeframes a buyer has in the offer are often considered as important as the offer price,” says …….