Selling in a Hot Market

It’s no secret that now is a good time to sell. Over the last 2 quarters the average home price has continued to increase. Add this to the low inventory of home available and the high demand of homebuyers, the real estate market shows a promising return for sellers at the moment. For most, selling in a hot market will equal multiple bids. But what do multiple offers mean for an in-demand home seller? Besides the potential to cause a bidding war and increase the sale price on your home, competing offers can create some stress when not handled properly.

Strategies for Multiple Offers

While there’s no one right way to handle this situation. Knowing your options definitely helps. To help give you an idea of the best way to approach this situation, here are some strategies for sellers dealing with multiple offers:

Ask all potential buyers for their best offer – Going back to all your bidders with a second ask is a good way to see who’s serious. This will help you to weed out the less serious buyers and can result in a higher selling price. But beware, that asking for more may turn off too many prospective bidders.

Counter one offer, and sideline/reject the others – If you’re looking to sell your home to a specific type of buyer this might help you give all bidders a fair chance. This would involve countering an offer that you like but think could be better in the long run, while sidelining a higher potential option while you decide. 

Accept the highest bid and reject the rest – This may seem like the most straightforward option, but take caution when deciding. A bid way over the asking price may seem tempting, but don’t skip due diligence on your prospective buyer. Many have been known to drop out before completing the sale in these types of high bid situations.

Beware of Contingencies

Before making any final decisions, be sure to read the fine print of all your offers. For instance, an all-cash offer may seem like the best option but it may also accompany unacceptable contingencies making a buyer with a loan a better deal. Beware of contingencies that require for the buyer’s home to sell before closing, or if their offer hinges on mortgage approval.

Also, be on the lookout for appraisal requirements which are common in a hot market as mortgage companies may not be willing to lend the difference if an appraisal comes in below the purchase price. One last thing you should always take note of is closing time is closing time. Make sure your buyer’s timeline to close matches up with your own schedule.

At the end of the day, take the time to discuss with your realtor which option is best for you and invest in some careful consideration before sealing the deal.