The thought of receiving multiple offers when selling your vacation home in Northwestern Wisconsin might sound exciting, but it can be hard to know the correct way to proceed to ensure your success. Here are some tips for handling multiple offers on your home.
The Price Offered by a Buyer Isn’t Everything
Price isn’t everything; in fact, the failure rate for a home sale transaction in a multiple-offer situation is as much as 50%, largely because buyers get competitive and make offers they can’t necessarily keep—and 77% of sellers simply accept the offer from the bidder with the highest bid.
Sure, a high price is great, but high offers can mean that the buyer is making more of a financial stretch and might have trouble procuring a loan for that large an amount or run into other difficulties at the closing table. Here’s how to avoid choosing a buyer who can’t follow through on their offer.
Review the Terms of the Entire Contract with Your Agent
Before you jump to accept the highest offer, make sure you and your agent sit down and take some time to review the full contract offered by a buyer—not just the price. Here’s what to look for.
The Contingencies
Conditions are conditions that, if not met, allow a buyer to back out of a sale. This can include getting approved for a mortgage, your home passing an inspection, and ensuring the home appraises at a certain value. Fewer contingencies are usually better, as they provide fewer opportunities for the buyer to cancel the sale.
The Buyer Funding
An offer from a buyer who is preapproved for a loan is much stronger than one from a buyer who is not. You should also review the lender the buyer is using (larger name with a good reputation for processing speedy transactions or an unknown lender?), how much cash the buyer will be paying (more cash means a smaller loan), and whether the buyer is willing to pay more cash if they’re approved for a smaller loan than expected (say, if the home appraises below the offer price).
The Closing Period
When is the buyer wanting to finalize and close the sale? A buyer looking to close in a few weeks will be a more serious buyer than one who’d prefer to wait a few months.
Any Buyer Incentives
Sometimes, buyers will include “extras” in their offers, such as offering to pay some closing costs or providing an escalation clause, which means they will outbid another offer by a certain amount. These can help a particular offer stand out from other similar offers.
Always Work with An Agent When Selling a Home
The most important thing you can do when selling your home is work with an experienced and highly-qualified agent in your area. And if you’re thinking of selling a vacation home in Northwestern Wisconsin, then that’s McKinney Realty. Contact us today to learn more about selling a vacation home, view the sale prices of similar homes in your neighborhood, or list your home with McKinney Realty.