Purchases and Sales have increased in the last few weeks and the Adam Leitman Bailey, P.C. transactional team is here for it! In fact, several of our selling clients have received multiple offers on their properties, and here are a few tips on navigating through this choice.
Although it is tempting to go with the Purchaser who makes the highest offer price, there are several other factors a Seller should consider before making a final decision.
One factor to consider is whether the Purchaser will finance the purchase with a mortgage or pay all cash. If a Purchaser is obtaining a mortgage, the Seller should request a pre-approval letter from the Purchaser's anticipated credited lender to confirm the Purchaser will have the funds available for closing. The lender will only issue the pre-approval after reviewing the Purchaser's debt-to-income ratio, credit, assets, liabilities, etc. This is different from a pre-qualification letter, which is a much more basic letter issued without reviewing the Purchaser's finances in depth. Of course, a Purchaser obtaining financing will in most cases take a bit longer to close than a Purchaser bringing all cash funds. The lender will conduct an appraisal and may have certain requirements and an all-cash Purchaser may not. However, there are still very important factors to consider when choosing between the two, such as potential Purchaser contingencies.
Some Purchasers may have a specific closing timeframe they need to meet. An all-cash Purchaser may want to close quickly and move in right away, whereas the Seller may need time to move or find a new residence. Other purchasers may have to sell their current home to purchase this one. If their sale falls through, so will this one. Some Purchasers may request an inspection or certain repairs, while others may not.
The bottom line is there are no clear-cut answers when choosing between multiple offers. It is important for a Seller to seriously consider all offers before signing a Contract with a Purchaser. A Seller should keep an open mind and consider all factors thoroughly by discussing options with both their realtor and attorney.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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