SANTA MONICA – It’s always an exciting time receiving multiple offers on the home you’re selling. It’s usually ensued by a bidding war which brings even more excitement for a seller. However once the bidding has settled down it’s now time to choose an offer. Jumping on the highest bid may not always be the best way to go. A top Santa Monica Realtor explains the main points to consider when analysing which offer to accept when selling your home.
1. Is the Buyer Prequalified for the Loan?
Though it doesn’t occur often, occasionally an offer will come in with no pre-approval letter for the loan. Never accept an offer without proof of ability to purchase. The last thing one needs is to wait out a 30 day escrow to only then discover that the buyer can’t get the loan. By this time your other bidders may have also gone elsewhere. Always demand proof of ability of purchase from all bidders, whether it is an offer with a loan or all cash. Bidders should accompany their offer with a formal pre-approval letter from their bank, or proof of funds if they are buying all cash.
2. How Big is The Buyers Deposit?
The size of the deposit shows how keen the buyer is in your home. Typical deposits range from $1000 to $10,000 or more. The higher the deposit the better. If things go south for the buyer they will stand to lose that deposit to you. This will help you cover the extra mortgage payments you will need to make from being held up by that buyer. It is in your best interest to have a higher deposit.
3. Is There An All Cash Offer?
The old saying ‘Cash is King’ was originally coined in real estate. If you were fortunate to receive an all cash offer then you are in the box seat. An all cash offer means a buyer can close in a matter of days compared to waiting on an offer with a loan. A lender must do their appraisals and then finally send out the money, which typically takes a minimum of 30 days. There is always a risk in accepting an offer with a loan. An offer with a loan can fall through even in the last moment. The reason may be as whimsical as the buyer lost a few points on their credit score during the month of escrow. Cash is always the best, and because of that it is usually a lower offer than the other offers. You will have to weigh up these other points of consideration before making the final call on a cash offer.
4. How Long Until They Can Close?
The faster the closing the better. Sometimes a buyer may want a long escrow because they are moving from another city, or awaiting the closing of their current property. They may demand a 45 day or 90 day closing. A 90 day closing means you must pay three more mortgage payments. This needs to be factored into your net profits. It is usually recommended to put the 90 days closing at the bottom of the pile.
5. Does the Buyer Have any Contingencies?
Occasionally you may receive an offer with a contingency. The most common contingent offers are an offer contingent to the sale of the buyers house. In other words your buyer has to wait till the sale of their current house closes before they are able to pay for yours. When you are desperate you may have to accept such a weak offer, but in the case of multiple offers then this too should go to the bottom of the pile. What happens if the buyer of your buyers house falls out? That can leave you high and dry. Don’t get caught up in this mess if you don’t have to.
Santa Monica Real Estate Agent recently published their new website to assist buyers and sellers in the Santa Monica area. If you are considering buying or selling locally then you can see directions to Santa Monica Real Estate Agents office here.
The Service Area for Santa Monica Real Estate Agent.
Santa Monica Real Estate Agent is located at 2200 Santa Monica Blvd, Santa Monica, CA, 90405. Contact the office at (310) 314-5004.
For additional information, or to book a home sellers report and evaluation, visit the website at http://www.santamonicarealestateagent.net.
Company Name: Santa Monica Real Estate Agent
Contact Person: Scott Hammond
Email: Send Email
Address:2200 Santa Monica Blvd
City: Santa Monica
Country: United States