Evaluating an offer can be tricky, especially if there’s more than one of them to consider at the time. After all, it only makes sense that you’d want to pick the offer that works best for you. To that end, I’ve laid out four questions that you should ask in order to determine if an offer makes sense for you. Read them over so that they’ll be in the forefront of your mind when you need them most.
Does it meets your bottom line?
You probably know that the benefit of selling your home is getting money from the sale. However, that said, that doesn’t necessarily mean that the highest offer is always the best choice. What matters most are the net proceeds that you’ll receive.
Net proceeds signify the amount of money that you walk away with after sitting at the settlement table. While you may assume that amount of money would be equal to the sale price, that is not always the case. This could be due to a couple of different factors:
Buyers can request that sellers make concessions, often in the form of helping them put money towards their down payment or closing costs. Typically, these concessions come in the form of a flat fee off of the sale price.
Sometimes, after the inspection or appraisal, you’ll be asked to cover the cost of some repairs. These invoices are typically paid out at settlement and, as such, the money for the repairs comes out of your proceeds from the sale.
In either case, you’ll want to subtract the amount you owe from the sale price in order to find your net proceeds.
Are you happy with the contingencies?
Technically, anything that needs to occur in order for the transaction to move forward is considered a contingency. They could include securing financing for the buyer, ordering a satisfactory appraisal, or making any repairs negotiated during the inspection time frame.
When the buyer puts together an offer, they can include any contingencies that they want in the offer. However, you need to make sure you’re okay them before you accept the offer. If the buyer has a house to sell in order to move forward with the transaction, for instance, you may want to evaluate whether you’re willing to wait for that to happen.
Does the time frame work in your schedule?
There’s no getting around the fact that moving requires a lot of coordinating time frames. Either, you sell your house first and chance having to find temporary housing before you move into your new home. Or, you buy your new home first and chance having to carry two mortgages until you find a buyer.
When evaluating an offer, make sure the time frame for closing that’s included in the offer works with your schedule, especially when it comes to figuring out when you’ll be able to move into your new home.
Do you have a good feeling about it?
Last, but certainly not least, when you go to select an offer on your home, you want to make sure that you feel good about it. This is one situation where you certainly want to go with your gut.