How do you know if an offer is the best one for you?
As a Seller, the day will come where you receive an offer from a Buyer to purchase your home. Depending on the Market, you may also get multiple offers! Well, how do you know if the offer is the best one for you and your family + situation?
Lucky for you, your Realtor will be your go to guide to help you vet out the merits and possible wicked offers. Is it always about the price? If you ask me, I would say not necessarily. A Buyers high offer may not seem so attractive anymore if it is contingent upon you moving out of your home a month earlier than planned. Or contrariwise, you may prefer a fast closing over a high price as you have received a promotion and need to move out of state within 5 days and need to sell like yesterday. Do you want to take top dollar plus get all your needs and wants? Of course you do! Is it possible? MAYBE! Other than price, you may want to consider a few other things
- The earnest money deposit. Also known as your good faith deposit or your deposit to hold the house. One important consideration when weighing an offer is the size of the earnest money deposit. A standard EMD is 1% to 3% of the cost of the home (so, that would be $5,000 to $15,000 on a $500,000 house). If a buyer tries to back out of an offer for no good reason, the seller typically keeps the EMD. So, the higher the earnest money, the stronger the offer.
- The contingencies. Most offers have contingencies. These are requirements that must be met before the transaction can go through and close. If these requirements aren’t satisfied, the buyer is entitled to walk away from the deal with their earnest money. The most typical contingencies are inspections, appraisal, and financing. Contracts with fewer contingencies are more likely to reach closing, and in a timely manner.
- The down payment. Depending on the type of mortgage, the buyer must make a down payment on the house; the size of down payment can affect the strength of the offer. In most cases, a buyer’s down payment amount is related to the home loan they’re taking out. There are also county loan limits.
- The closing date. Settlement, or “closing,” is the day when both parties sign the final paperwork and make the sale official. Typically, the whole process takes between 30 to 60 days. Do you need a faster closing?
Your Realtor should understand what you want out of the home sale financially and personally so work with them and communicate to determine what type of offer is best to satisfy your goals.
Blackrock Investments and Finance, Inc.
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