Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN
Judy@JudithSutton.com 908 803-0472
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Why the Best Offer is not Always the Highest Offer
an analysis...
For many home sellers, the highest offer is undoubtedly the best offer. However, there can be other factors at play—particularly timing. For sellers who need to move quickly, an offer’s terms often matter just as much or more than the price itself.
The Role of Contingencies in Slowing Down a Sale (possibly)
One of the biggest factors that can delay or derail a home sale is contingencies. These are conditions buyers include in their offers that must be met before the sale can go through. (see my previous blog that describes these possibilities)!
A home sale contingency means the buyer has to sell their current home before they can complete the purchase. If their sale is delayed or falls through, it could leave the home seller stuck waiting.
A financing contingency allows a buyer to walk away if they can’t secure a mortgage. Even if they’ve been pre-approved, changes in their financial situation or lender requirements could cause unexpected issues..
An inspection contingency gives the buyer room to negotiate repairs or back out if they don’t like the results of the home inspection. While inspections are normal, an overly cautious buyer may ask for unnecessary repairs or price reductions.
An appraisal contingency protects the buyer if the home doesn’t appraise for the purchase price. If the lender won’t approve the loan for the full amount, the deal could stall or require renegotiation. With a good Realtor as your advisor, she will consider your long term financial goals and objectives. Coldwell Banker trains us to offer comprehensive, fact-based advice using current statistics and facts to help you make smart decisions.
Even if an offer is the highest, if it comes with contingencies that can create delays or uncertainty; it may not be the right choice for a seller who needs to move quickly.
Why Cash Offers and Pre-Approved Buyers Can Be More Attractive
In competitive markets, cash offers often win out, even when they aren’t the highest. A cash buyer eliminates the risk of financing falling through and can often close in days rather than weeks. This is a major advantage for sellers working under tight timelines.
Even when cash offers aren’t on the table, a buyer who is fully pre-approved and has a strong financial standing is a safer bet than someone still in the early stages of securing a mortgage. Offers from buyers who are already pre-approved for the full purchase amount reduce the risk of delays caused by financing issues.
Closing Timeline and Flexibility
Speed matters, especially for sellers who need to move fast If a seller needs to be out quickly, an offer with a faster closing timeline—even if it’s not the highest—may be the more attractive choice.
Flexibility can also be a key factor. Some buyers may be willing to close quickly but allow the seller extra time to move out.
Earnest Money and Buyer Commitment
Earnest money is the deposit a buyer puts down to show they’re serious about purchasing the home. A higher earnest money deposit signals stronger commitment. If a buyer backs out without a valid reason, the home seller usually gets to keep the deposit.
An offer with a lower purchase price but a higher earnest money deposit can sometimes be a better choice than one with a higher price but weak financial backing. A buyer willing to put more money on the line upfront is often more committed to closing the deal. And attorneys love it!
Choosing the Offer That Gets to the Finish Line
The goal isn’t just to accept the highest offer—it’s to accept the offer that will actually close, and close quickly. An offer that looks great on paper but comes with financing risks, long closing timelines or excessive contingencies could end up costing a seller time and money in the long run.
Need Help? Call me. I will be glad to show you the way!
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while ensuring that your property receives the exposure needed and terms of the contract met
to attract buyers from anywhere
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Judy@JudithSutton.com
COLDWELL BANKER...GUIDING PEOPLE HOME SINCE 1906
908 803-0472
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