Selling a house today is both easier and more difficult than it used to be. It’s easier in that you’ll likely get multiple offers owing to low inventory and buyer competition. It’s more difficult because now you have to evaluate those many offers and choose the best one. And the amount of the offer, the offered purchase price, is often far from the most important criterion for accepting an offer – primarily because, under current market conditions, you’ll get your asking price or close to it anyway. So how do you decide which is the best offer? Read on to discover 5 things to look for when evaluating offers for your Kauai house.
1. Size of the Down Payment
When evaluating offers for your Kauai house, you should pay close attention to the down payment offered. As one industry pro puts it: “An offer by itself is just a piece of paper and a handshake, but an offer accompanied by a big wad of cash…now you’re talking!”
When a buyer is willing to offer a larger down payment, that means she is a serious buyer, and the offer is one you should consider. “A down payment from 20% up to 50% says it’s the real deal.”
You do have to make sure, though, that the promised funds for the larger down payment are in fact available, which typically means liquid assets. You can consult a Kauai agent at 808-634-4518 to find out more about this.
2. Number of Contingencies
Another important aspect of evaluating offers has to do with contingencies – the things that have to happen before the transaction can be finalized and you get paid. Contingencies, such as the sale contingency or inspection contingency are common and typically protect buyers. But an offer with too many of them should make you wary.
You should be especially on the lookout for contingencies that pose more risk to you as the seller. Chief among these is the home sale contingency, which stipulates that the sale is contingent on the buyer’s selling her current home. The problem is that you have no way of knowing whether or when such as sale will happen. Just be sure to consult your Kauai agent at 808-634-4518 for assistance in evaluating contingencies.
3. Concessions Asked for
Similarly, you should also take into account the concessions the buyer asks for when evaluating offers for your Kauai house.
For example, a buyer “may ask you to purchase a home warranty policy, which can range from about $350 up to $800 or more, . . . or they may even ask you to undertake some major home repairs before closing. When it comes to those repairs, bear in mind that having these done will not only affect your profit margin on the home sale but also your timetable. If you need to sell your home as quickly as possible, go for the offer where the buyer is willing to take your house ‘as is.’”
4. Buyer Pre-Approval
Also, when evaluating offers, keep in mind that an offer from a buyer who has been pre-approved for a mortgage is usually a better offer.
“[M]ortgage pre-approval means the potential buyer has already worked with a lender and that a loan officer has examined his or her finances (income, debt, assets, and credit history). The lender then determines how much money that buyer can borrow and issues a letter that shows how much they can borrow to purchase a house.”
A buyer who has been pre-approved is a serious buyer who has the ability to pay what she offers. That’s why many agents advise their seller clients to consider and accept only offers from buyers who have been pre-approved for a mortgage.
5. Who Pays Closing Costs
A final important consideration in evaluating offers concerns who pays or will pay the closing costs.
Both sellers and buyers have costs to pay at closing, but the bulk of closing costs falls to the buyer. “While sellers pay the real estate agent’s commission, buyers have a laundry list of fees to pay for such items as a credit report, a home appraisal, a title search, and the cost of hiring a real estate attorney to draw up the sales contract.”
It’s not uncommon, then, for buyers to ask sellers in the offer to pay some or all of the closing costs, which can amount to 2% to 5% of the purchase price. Sellers often agree to this in order to get the sale to go through. Still, it’s a big chunk of change and something to carefully consider before accepting the offer.
A Kauai Agent Can Help With Evaluating Offers
These are indeed important things to look for when evaluating offers to make sure you choose the right one. But a final thing remains to look for. And that is an experienced, local Kauai. Your agent, with her experience and knowledge of the local market, can provide invaluable (maybe even necessary) assistance in assessing offers. For the help you need in evaluating offers for your Kauai house, contact us today at 808-634-4518.