Multiple Offer: How to Choose the Best
Is the highest offer the best
To choose the best among multiple offers doesn’t necessarily mean to take the highest bidder. It is a quite complicated decision process. You may have to weigh all the main factors and hedge against the risks of the possible deal killers.
Consideration and priority
You would consider the following factors and list out your priorities.
Is Maximizing your equity return the only concern?
How fast do you need to liquidate your asset?
Do you have a second home to stay in?
Your personal circumstances such as family change, kids school change, job relocation, etc.
Offer analysis
You need to gauge the impacts of conditions or contingencies included in the offer.
Financial conditions and home inspection conditions are among the most popular ones together with some other conditions.
Those conditions may protect the buyer to back off the deal and should be reviewed seriously. For instance, a more detailed and specific description of the financial condition may seem more binding on the buyer than that of a more general description.
All cash offers may relieve your worry of potential financial failure. However, the source of funds may need to be verified.
Some conditions like buying contingent on selling existing homes would put more risks to the seller.
Know more about the buyer
You want to know more about the buyers on their financial stability, willingness to compromise, and their flexibility on certain clauses and timelines.
Emotional Influence
You would need to mitigate the emotional influence, which may come from a buyer’s offer letter, and the pressure from yourself, your family, your neighbor, and the realtor.
In Sum
You would make a final decision to pick the most appropriate offer after analyzing your priorities and the pros and cons of those offers. It is an art to balance the proceeds, risks, time, possibility, and uncertainty.
