Monday, July 31, 2017

Don’t Let a Bidding War Backfire: Best Suggestion for Selling Your Home | From: US News Real Estate

From: US News Real Estate

If you're trying to sell your home, buyers should be ringing your doorbell any moment now. This is a seller's market. The National Association of Realtors' midyear forecast, which came out in mid-May, indicates that the number of sales of existing homes (that is, a house that's already been lived in) will rise 3.5 percent to 5.64 million sold this year. Next year appears promising for sellers as well. In 2018, sales of existing homes are expected to climb another 2.8 percent, to 5.8 million.

Naturally, in this favorable climate, a lot of bidding wars have reportedly been breaking out. And a bidding war is the American dream after owning your own home – having complete strangers begging you to buy your home and pay you more money than you anticipated.

But while a bidding war can be good for your bottom line, having one break out doesn't mean that you're guaranteed to sell your home. Sometimes, in this type of war, you're the one who becomes the casualty. That's why, if you start getting multiple offers, you'll want to make this suggestion part of your battle plan.
Don't automatically seize the highest offer. It's easy to be dazzled by the dollar signs being thrown at you, but it may be a mirage.
"In almost all circumstances where a seller receives multiple bids, the strongest offer is not determined by price," says Holly Gray, a real estate broker with RE/MAX Pacific Realty in Bellevue, Washington.
Sure, price is important, but Gray says you should also be thinking about factors such as the amount of earnest money that the seller is willing to pay. There also may be clauses in the contract that would typically give them an exit if they suddenly wanted to back out of buying your house for some reason.
In other words, if the highest offer is coming from someone who seems wishy-washy about buying your home, or who doesn't have approval from their bank for a loan, and there's a lower offer from someone who appears levelheaded and enthusiastic about moving in and has the financing lined up, you can probably figure out who has the better offer.

Brian Morgan, a real estate broker at Citi Habitats, a brokerage in New York City, agrees that the biggest offer may not be the best. "Sellers get blinded by big dollars and a preapproval letter," he says. "If the loan falls through … it's back to square one."
Morgan says he sees this a lot, sellers letting their greed get the best of them. "You don't want to cause a buyer to walk away out of frustration because they are tired of playing games," he says.
If you do have multiple buyers making multiple bids, Morgan suggests giving all the parties the opportunity to present their best and final offer, "which is the absolute highest price they would be willing to pay for the home."

Not only is that fair and will shorten the selling process, Morgan says, it's the most effective way to get the highest possible price.