After the house has been prepped, staged and shown, the offers to buy will hopefully be quick to follow. When they do arrive, sellers will be faced with the decision of whether to accept.
“There’s always going to be a buyer’s remorse and a seller’s remorse,” says Ellie Johnson, president of Berkshire Hathaway HomeServices New York Properties. However, sellers can reduce their risk of regrets by knowing how to evaluate an offer and when it’s wise to accept one that is less than ideal.
For sellers, price may be paramount, but real estate experts say it takes more than a good selling price to get a good offer. “The price itself is just one part of the equation,” says Lawrence Lee, an associate broker with Triplemint in New York City. Sellers should also look at the following factors before saying yes:
[Read: When to Fire Your Real Estate Agent.]
Financing. It doesn’t matter how much an offer is if a buyer can’t get the money to pay the price. Offers made contingent on financing can be slow to close, and requirements from lending institutions could make it difficult to complete the sale if an appraisal comes in low.
If a buyer has a pre-approval, sellers may want to consider which institution is offering the loan, says Hillary Landau, a licensed real estate salesperson with Houlihan Lawrence in Briarcliff Manor, New York. Some large lenders may be slow to process paperwork and difficult to contact with questions. “Maybe I’d prefer to go with a smaller lender where you can actually talk to someone handling the loan,” Landau says.
For those buying a co-op, financing can also make it difficult to get board approval. Lee notes co-op boards require a significant amount of financial information from buyers, and their approval, in addition to that of the lender, is required for the sale to go through.
Because of the many wrinkles that can occur with securing a mortgage or other financing, cash offers provide sellers the most assurance of a successful closing. That assurance may make it worth accepting a lower price cash offer instead of a higher price offer contingent on financing.
[Read: 4 Rules to Live By When Making an Offer on a House.]
Other contingencies. Securing financing is one common contingency found in real estate offers, but it’s not the only one. Offers may be made contingent on the sale of another house, an inspection, an appraisal or something else. Sellers should consider whether a buyer’s requirements could jeopardize a sale or their anticipated timeline.
“Someone might want to have a full inspection and that may delay the closing,” Johnson says. The same could happen if the buyer’s current property doesn’t sell immediately, and there is always a risk of an appraisal coming in low. The latter is especially true in the spring if a slow winter season results in few sales to use as comparable properties during the appraisal process.
While it’s ideal if a buyer will waive these contingencies, sellers shouldn’t expect that. Landau says, as a buyer’s agent, she would never recommend someone purchase a property without an inspection. To let sellers know it won’t bog down the closing process, she tries to make sure she has an inspector lined up and that information is included in the offer. “That way they see that we’re not going to only submit an offer,” Landau says. “We can also close.”
Flexibility. The flexibility of the buyer is a final aspect to consider when evaluating an offer. “The closing date may be more relevant than the price,” Johnson says.
A seller who is still looking for a new home of their own may find value in a buyer who is willing to wait on closing. Sellers may also find it worthwhile to work with a buyer who is flexible on the terms, such as which furnishings are included in the sale, as opposed to one who is more strident.
[Read: 9 Factors That Can Torpedo Your Home’s Selling Price.]
When to accept and when to wait. Sellers who receive multiple offers at once can easily weigh them to find the best deal. However, it’s more difficult for those receiving a single offer to know whether it’s worth taking or if they should wait for something better. “The rule of thumb is that your first offer is usually your best,” Johnson says.
In some cases, a seller’s situation may play a significant role in deciding whether to accept an offer. If someone needs to move quickly for a job or is having financial difficulties, “They may have to begrudgingly take certain terms,” Lee says.
However, not all real estate sales are about dollars and cents. Landau encourages people on both sides of the transaction not to forget the human element involved. “As a seller’s agent, I value getting a personal letter from a buyer,” Landau says. Sellers often have good memories of their property and want it to go to someone who will appreciate it as they did. A letter explaining why a buyer is interested in a house can go a long way toward sealing a deal.
“It’s nice to go to the closing table feeling good,” Landau says. For some sellers, that feeling may trump the extra money they might get from waiting for a better offer to come along.
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Did You Receive a Good Offer on Your Home? originally appeared on usnews.com
