How to Evaluate an Offer on Your Home

27 Sep

How to Evaluate an Offer on Your Home

Multiple offer situations have become the norm in our market today: over the asking price, under the asking price, cash offers, etc. As a seller it can be hard to decide which one is best for you.

The first mistake many sellers make is choosing the highest offer without doing any research. Does that buyer have the funds or financing to make such an offer?

Find out which buyers are preapproved. Preapproval is different than a prequalification letter. When someone is preapproved, they have worked with the lender, given the proper documentation, filled out an online application and income has been verified. Prequalification is when a lender tells a buyer what they would qualify for if the information given, such as income, assets, etc., is correct and verified.

Once you know they are preapproved, what type of loan is it? How are they making their down payment? Some buyers will have contingency, where they must sell their home first in order to close with you.  There is nothing wrong with this, but it’s important to know you could face potential problems if their home doesn’t sell.

Another thing to consider is the closing date. Is it long period or short period and why is this? Closing a home typically takes 30-45 days. Is there a reason they need more or less time?

What about cash offers? Just as you want to make sure someone has the financing by preapproval, find out if the seller has the funds. This can be done by seeing a bank statement.

If you have any questions on multiple offer situations or how to get preapproved, please call me 502.220.4663 or email me at toddmartin@realtor.com

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