Wednesday, June 5, 2019

Dealing with Multiple Offers

6 of the 8 offers we recieved on 5386 Gold Dr

Every home seller's dream is to receive multiple offers when they put their home on the market.  But be careful what you ask for.  2 or 3 offers can be a blessing but when you get above 5 it can get tricky deciding which one is really the best.

At first blush, the easy answer might be "pick the highest price", but there is more to selling your home than just the price.  The California Association of Realtor's purchase agreement is 10 pages long.  Here are  a few of the variables a seller needs to consider in any offer:
  • Price
  • Length of escrow
  • Is dual agency a factor
  • Is the buyer moving in or is this an investment
  • Amount of the deposit
  • Are the buyers asking you to agree to Liquidated Damages?
  • What type of loan are they getting
  • Are they preapproved
  • Is there proof of sufficient funds to close escrow?
  • Does the home need to appraise?
  • How long is the inspection contingency period
  • Is the buyer asking for appliances and other personal items?

If you have 5 offers, you can't make them all equal to each other with a simple counter offer.  Some buyers may be getting a VA loan which requires all Sec I pest work to be completed at the seller's expense.  Some buyers might be all cash but the cash is coming from a home they need to sell first.

My experience has been that typically there is at least 1 offer that is obviously superior.  Some buyers don't like looking a gift horse in the mouth, and will just choose to accept the best offer submitted.  But  if there are several offers that are a close second, the superior offer can be used as the offer you'll use to judge and negotiate the others.

My experience has been that there are always a few offers that are so poorly written, that you can discard them right away.  In the past, offers that my buyers have discarded were because the buyer had not even seen the home yet.  The buyers had no evidence of pre-approval or they had a home to sell which hadn't even been listed yet.

My most recent sale on Gold Drive had 8 offers.  The easiest thing to do was to create an Excel spreadsheet then break each contract down into the negotiable parts.

Excel spreadsheet used to compare multiple offers

We threw  4 away right off the bat.  We then compared the remaining 4. The question I asked my client with each individual offer was: What would make you want to take this offer?  Better price? Faster Escrow? Take the home "As-is"? Bigger Deposit?  With each offer, I took notes on what my client would want in order to accept it.  Then, when we were done, I prepared counter offers specific to each offer we'd discussed.  

After the counter-offers were sent out, we were left with 2 remaining offers.  Ultimately an extra $5000 was what it took for the prevailing offer to succeed in the multiple offer scenario.  

If you'd like more information on how to deal with multiple offers, or the best stratagy for obtaining multiple offers contact me.

I love living in Rincon Valley!  I've lived here since 1995 and can't imagine living in a better North Bay community.  Call me today if you're interested in buying a home in Rincon Valley, or if you'd like to list your Rincon Valley home for sale.  

Jim Cheney, Your Rincon Valley Realtor
  • Jim Cheney, Broker
  • Saint Francis Property
  • (707) 494-1055
  • Rincon Valley - Santa Rosa
  • Your Rincon Valley Realtor
    DRE# 01368633

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