In this article:
Should you always accept the highest offer when selling a home? That depends on three major factors:
- How strong is the offer overall? Are there a host of contingencies?
- Do you need a higher price to pay off your mortgage and other costs?
- Is the timing in line with your needs?
If you’re selling a home with no time constraints a top price may be your top priority. If the deal falls through, it won’t necessarily disrupt your life. But if you may need a faster close or a surer deal, and in that case, a lower offer may be the better one for you.
Listen when your agent presents offers
Your agent calls by with multiple offers. And all you hear is, “Blah, blah, blah $x … blah, blah, blah, $y … blah, blah, blah $z.” You lose patience and just want to cut to the chase — the highest offer.
It’s natural to focus on the bottom line. But those blah, blah, blahs may mean you’d be better off accepting a lower offer.
So ask your agent to run through those offers again, explaining in language everyone can understand, the pros and cons of each. Pay particular attention when he or she talks about contingencies, cash or mortgage and the time to closing. Because the highest offer when selling a home isn’t always the best.
Take the highest offer when selling a home … sometimes
There’s no point accepting an offer that’s higher than another if it will cost you more than the difference to comply with its conditions. For instance, one buyer offers full price but then wants a 5 percent credit for closing costs, while another offers 97 percent of your asking price and wants no other considerations.
Or what if you get an unexpected quick sale? Perhaps you’re yet to find another home or the one you’ve set your heart on won’t be available for a couple of months. Accepting an offer with a 10-day close would mean paying rush rates to movers and then forking out for storage and hotel bills or an apartment rental.
Even leaving aside the additional stress and disruption, you may be better off with a lower offer that doesn’t impose these extra costs.
On the other hand, maybe you’ve already closed on the home you’re buying, or will do so very soon. The nightmare of paying two mortgages is either already upon you or looming. Then, a quick close could save you many thousands. It pays to do the math before making a decision.
You could probably do the calculations on the back of an envelope. But, when you’re doing your arithmetic, take into account some other factors …
Few purchase offers are unconditional. They typically come with “contingencies,” which are basically let-out clauses that allow the buyer to walk away unscathed from your deal in certain circumstances.
Buyers can write any contingencies they want into their offers. Common ones include:
- Mortgage finance — If the buyers don’t get their…