It’s the sort of dilemma that many sellers dream of: choosing between a multitude of purchase offers for your home.
But making the right decision can seem overwhelming–the way a 7-year-old feels when selecting his favorite cereal at the supermarket.
It’s not uncommon for the owner of a coveted home in a prized neighborhood who gets multiple bids to worry that he’ll pick the wrong offer. And the seller’s concern is sometimes justified. In some instances, the contract with the sweetest price could sour before the deal closes, real estate specialists caution.
“You’ve got to look at the entire contract, not just the price,” Jerry Varner warns. He and his wife, Wanda, own and operate two Century 21 offices.
Indeed, a supposedly “spectacular offer” (5 percent or more above your asking price) may include so many extra demands that you’ll actually receive less in the end than if you had taken a “lower” offer, says Peter G. Miller, the author of several real estate books.
Also beware of a supposedly generous offer that is littered with so many “weasel clauses” that it’s unclear whether the deal will ever go through, he cautions. “You have to ask yourself: `Is this the beginning of a sale or a fight?’ ” says Miller, co-author of “Successful Real Estate Negotiation” (HarperCollins, 1994).
It’s not always possible to identify in advance a buyer who could prove problematic to you. But Miller contends that some people make it obvious they intend to “negotiate and renegotiate” a contract until the bitter end.
“If you see an offer that looks like the phone book because it has so many tacky clauses, then you know you’re dealing with an annoying set of buyers who will set you up for weeks of argument and debate,” he says.
From the outset, for instance, a problematic set of buyers might demand that you replace the washer and dryer even though the current appliances are still operating. They might also ask for a complete interior paint job and a new roof that isn’t necessary.
What’s more, you can’t assume that the demands of such buyers will end once you’ve agreed to their original contract proposal. Many buyers now engage professional home inspectors. And assuming the inspector finds problems (which is likely), some buyers consider delivery of the inspector’s report “round two” in your boxing match.
“For reasons of ego and territory, some enjoy nit-picking the seller,” Miller says.
Here are three other pointers for home sellers facing a choice of offers:
– Seek profiles of the rival bidders from your agent.
When you’re dealing with multiple bidders, some may seem like faceless mysteries. In that case, you’ll want your listing agent to request more information on the bids than is apparent from the paperwork alone, says Roberta Trousdale, a Re/Max agent.
Trousdale recently put a one-story, blue-and-white stucco house on the market for a couple in their early 30s who are relocating elsewhere in the state. The 63-year-old house, with its comely archways and big bay window, immediately attracted two offers.
But the couple rejected the higher of the two offers–from an investor willing to pay $7,000 more than the eventual buyers–in favor of a couple in their mid-50s. And the information Trousdale gathered about the two bids helped the sellers make up their minds.
The higher bidder proved to be a woman who sought to buy the house on the hunch that it would increase in value in the coming three months, after which she hoped to sell it for a profit. Hence she wanted the sellers to wait 12 weeks before closing.
On the other hand, the lower bidder was willing to close in just six weeks, making for a swifter transition for the relocating sellers. Through Trousdale, the selling couple also discovered that the lower bidders appreciated the interior architecture of the home they loved. This intangible factor made a genuine difference to the owners.
– Garner data on the financial circumstances of rival buyers.
Real estate professionals constantly stress to would-be buyers the importance of gaining full preapproval for a mortgage from a lender before they make an offer on a home. Yet just 15 percent of buyers now follow that advice, says Jerry Varner.
Because so few offers are accompanied by a genuine lender’s preapproval statement, Varner suggests it could be smart to ask a high bidder to seek immediate mortgage preapproval before you make your final decision on his proposal.
Indeed, if you know your home is going to be a gem in the eyes of potential buyers, you might be even more aggressive on the preapproval issue. In especially hot neighborhoods, where for-sale properties are scarce, some selling agents are indicating right in their listings that “only pre-approved offers” will be considered, an idea Varner encourages in select cases.
– Don’t assume that multiple offers mean you underpriced your home.
Instead of being overjoyed by the right to choose among rival offers, some sellers second-guess themselves. They think the presence of multiple bids proves they should have asked more for their home in the first place.
But that assumption is usually false, says Trousdale. Although it’s an art rather than a science to price a home properly, most homes are listed correctly. And, ironically, sellers who become greedy usually get fewer offers and a lower price than those who price well and engender competition among rival bidders.
