Every homeowner wants to be able to sell their home for as much as possible to maximize the most significant investment you have. The most important step to set yourself up for success is to work with an experienced real estate agent who has a plan for how to best set up your listing to receive multiple offers and maximum value.
Being prepared and working with a qualified agent is crucial because you will likely only get one opportunity to maximize this opportunity. Learn how to prepare correctly for this once-in-a-lifetime chance.
How to List Your Home to Get Multiple Offers
There is no magic solution or guarantee that even the best realtor can help you start a bidding war on your home. However, you should be able to work with a qualified agent to prepare your home to set yourself up for success.
The bottom line is that you either need a home in excellent condition or with excellent pricing and a qualifed real estate agent representing you to attract multiple offers on your property.
What You Can Control
Updating your home [link to DIY vs Pro article] and decluttering and cleaning [link to decluttering article] can go a long way to help your house be competitive to prospective buyers. Location is always important, so understand your local school districts, parks, and other amenities that your listing agent can highlight.
It’s also essential to have a realtor who understands your local market [link to Edmon Market article] and how to price your home. Generally, homes listed for first-time homebuyers are a hot commodity, and the lower list price can create significant demand. Even homes that are not in excellent condition, if priced correctly can attract the attention of enough cash buyers or investors to create multiple offers.
What You Cannot Control
You cannot control the market conditions when you want to sell your home. These will shift based on supply and demand, especially because of interest rates.
In a normal market, homes can take 30-90 days to sell. However, when interest rates decrease – especially if it is a significant change – it will increase the demand for homes and could result in more multiple-offer situations.
How to Manage Multiple Offers
Before responding to offers, you should set your priorities.
1. Evaluate which contract is most likely to close.
While it’s tempting to think that price is the number one consideration, experienced real estate agents know the offer and can close the deal will ultimately best benefit their clients.
As you review the offers, consider first their financing. Are they working with a local, reputable lender? How far through the lending process has the buyer gone to verify that they are a strong and verified borrower? If they are using cash, review their proof of funds and see if they can access the money immediately or if there is a need to wait, like in the case of a trust.
Secondly, look at what agent is bringing the offer. In most markets, real estate is a small community, so your agent should be able to help you know which buyer is working with someone who can keep deals together. (And also, who has a reputation for busting deals at the last minute.)
2. Choose the offer that will net you the most money.
Your home is likely your most significant financial investment. As such, it is natural to prioritize which offer will net you the most money.
In very competitive markets, you may need to consider what will happen if an offer exceeds the appraisal value. (Appraisals are required for all home buyers borrowing money.) Some offers may include an “appraisal gap,” where a contract is written to include a cash offer above the appraisal price. Usually, this is a set amount, but in rare cases in extremely competitive markets, contracts can include a “blind gap” for any amount over the appraisal.
3. Close down contingencies that allow the buyer to get out of the offer.
Since you’ll likely only have one chance at a multiple-offer situation, it’s essential to see which offer has the least likelihood of the buyers backing out.
First, consider the buyer’s seriousness. This is most evident in how much earnest money they are putting up. The larger the earnest money, the more serious the offer. In some cases, the earnest money may even be non-refundable.
Secondly, look to see how clean the contract is. Are the buyers getting into the weeds, asking for many small home items to be fixed or adjusted? Look for a standard contract or even one willing to buy your house as-is.
4. Consider Your Unique Needs
Finances are likely your top priority. However, your schedule or other factors may be more important to consider in other cases.
If you are moving and need to close within a specific timeframe, consider the buyers’ ability to work within your schedule. While many buyers are flexible, some cannot adjust because they are in the process of selling their own homes, are in the military, or have other extenuating circumstances. Ultimately, this is your home sale, so you need to know your priorities before getting into a multiple-offer situation.
Red Flags to Be Aware Of
While most offers are from great potential buyers, there are a few red flags you want to be on the lookout for.
- Out-of-state or internet lenders can be problematic because the “pre-approval” process is so easy, and the lender generally doesn’t care if they close the deal.
- Buyers who ask for many extra things, such as appliances, home decorations, or repairs, can cause headaches throughout the sale process.
- Buyers with unrealistic expectations or inexperienced realtors can become more difficult throughout the process, decreasing your likelihood of closing the deal.
Finding the Right Real Estate Agent
The first step to setting yourself up for success is working with a trusted, experienced real estate agent. This is especially important in competitive markets because once you review offers, it’s important to work quickly.
Expertise comes over time, and having an agent who can help you know what to expect can help the process go more smoothly. Of course, no agent can perfectly predict the market or the buyers interested in your home, but the right agent will help you to navigate your unique circumstances.
Here are a few questions to ask your agent:
- How many homes have you listed and sold in the last 12 months?
- Of these, how many multiple offer situations have you handled?
- Do you belong to the National Association of Realtors?
- (For newer agents) Do you have a competent coach or mentor who can help advise you throughout the process?
Especially if you know that you become nervous or anxious in high-stress situations, work with your agent to understand the process and your priorities before listing your home for sale. A good agent will answer your questions upfront since they know that the process can accelerate and want to set you up for success.
Even the best agents understand that some deals fall through. While this is understandably disappointing, they will help you see that it doesn’t mean that your home won’t sell. Your agent should be able to work with any backup offers, recontact the previous interested parties, or re-list your home.
Listing your home for sale can be both exciting and overwhelming. This is especially true if you have a lot of offers to review. Work with a competent agent to select the offer that nets you the most money, causes the least headaches, and, most importantly, closes on your timeframe.
