What to Do When Selling Your Home Results in a Bidding War

What to Do When Selling Your Home Results in a Bidding War

If you find yourself in the middle of a bidding war after you put your Weehawken home on the market, this is an exciting yet complicated point in your real estate journey. There’s a good chance that you’re going to be satisfied with the offer that you ultimately accept. However, this is not the time to let your guard down or make any rash decisions without considering every possible outcome. Here are some of the steps that you should take as you decide which offer to accept and how to best move forward.

Proceed carefully

It’s tempting to accept the highest bid without giving it a second thought. However, there are several factors and nuances that can impact the quality of each offer that you receive. There’s a good chance that the number with the highest sales price isn’t actually the offer that’s going to enable you to walk away from the closing table with the largest check.

Picture this scenario. You make it clear that each buyer needs to submit their final offer for your home. You receive two offers for your property. One buyer is willing to pay $10,000 more for your home than the other. Your first impression is that the higher offer is the better offer, but upon closer investigation, you realize that this offer comes with a few conditions. Not only does the buyer want you to pay their share of the closing costs, but they also want you to include a home sale contingency that allows them to back out of the deal if their current property doesn’t go under contract by a specific date.

Knowing a little more about the quality of the first offer, you begin to look at the second offer. At first, you weren’t as interested in this offer because the sales price was so much lower. Not only does this buyer want to pay your closing costs, but they are also willing to waive the appraisal contingency in the event that your home doesn’t appraise before closing. Even though the second offer came with a lower price, there were a number of contingencies and clauses included that made it a more lucrative deal for you as the seller. Keep this example in mind as you field multiple offers on your home, and remember that an offer may not be as good (or as bad) as it initially appears.  Of course, your Weehawken real estate agent will help you evaluate each offer and choose the one that’s most advantageous for your goals.

Assess the buyer’s financial position

A higher offer is meaningless if the buyer can’t actually supply the funds necessary to purchase the home. Before you accept an offer, make sure you feel confident about the buyer’s financial position.

At a bare minimum, you should confirm that the buyer has a pre-approval letter from a lender for the amount that they will need to borrow to purchase your home. This doesn’t guarantee that the buyer will secure the loan during the underwriting process, but it’s a vote of confidence in their financial position.

Another important factor to consider is how much cash the buyer has to include in their down payment. Typically, homeowners prefer to choose the surest option when selling Weehawken houses for sale. This decreases the risk that they must take on and increases the likelihood that the sale can be completed. Typically, the buyer with the largest cash offer is the safest choice if you’re considering multiple offers that would provide a similar return.

Consider what will happen if your home doesn’t appraise

If your home is selling as a result of a bidding war, there’s a chance that it may not appraise for the sales price. Your agent will run a comparative market analysis before you put your home on the market to evaluate how much similar homes in your area are selling for. This is one of the key pieces of information that an appraiser will consider as they assess the value of your home.

If your home goes under contract for a much higher price than what it appraises for, buyers may struggle to receive funding from their lenders unless they are able to make up the difference by putting down a larger down payment. If a buyer doesn’t offer to waive their appraisal contingency with their higher offer, it may be a good idea to contact them and ask what they would do in the event that the home doesn’t appraise. Their answer could make your decision about which offer to accept more clear.

Compare the closing dates

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The best closing date is the one that works best with your schedule. If you already have another place to live, or if you want to get your money sooner, the sooner closing date will likely make the most sense. If you require extra time to pack, or if you don’t have your next permanent residence lined up yet, the offer with a closing date that’s several weeks away may be a better choice for you. In most cases, closing is scheduled 30 to 45 days after you initially agree to a deal. Before you accept an offer, ask the buyer when their preferred closing date would be. If the offers are similar in value, you might benefit from choosing the buyer who is most flexible and can best work around your schedule.

Team Francesco helps sellers navigate their way through bidding wars for Weehawken houses for sale on a regular basis. The homes they sell often receive multiple offers because of their effective marketing strategies and their superior home staging efforts. They will help you break down each offer to make a wise and informed choice. Reach out to their team if you’re looking for a trusted advisor who can represent you through the process of selling your home.

*Header photo courtesy of Pexels

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