If you have to ask the question, how do I handle multiple offers?
Well, it really depends. And every situation is different. But multiple offers have to be handled with care. One in the hand is better than two in the bush. And not only is the price important, but it’s also the terms.
Cash offers vs. Financing Offers
So if I’m comparing a cash offer to a financing offer, I need to have some consideration for whether we think that the appraisal might be a concern. So once we identify the strengths and weaknesses, then we have to make a decision.
If we get a full asking price offer that gives everything that we want, then the idea of waiting for more is pretty risky because that’s where greed starts to enter into the equation and you can end up alienating the buyer. And when the right property comes on the market, they are ready to pounce and take action.
There are many wealthy buyers and vacation home buyers in the Sunshine State — both of which are more likely to pay cash. Compared to financed offers, cash offers provide house sellers more assurance that the transaction will go through. Additionally, they speed up the property purchase process.
Moreover, and maybe most importantly, a cash purchase guarantees there won’t be any future appraisal issues. When purchasers utilize a mortgage loan to buy a property, the lender will have an appraisal to make sure the house is worth what they are lending. The buyer is obligated to pay the difference between the assessed value and their offer if it is not.
In an environment where bidding wars are frequent and bidders frequently offer more than the asking price and market value, this might provide a significant difficulty. Even after several weeks have passed, it can lead purchasers to cancel the transaction. In fact, 15% of transactions that fell through in April 2022 were because of problems with the appraisal, according to the National Association of Realtors.
Always Have a Backup Offer
So the goal is to have an accepted offer and a backup offer in place. Although the initial buyer and you, the seller have signed a contract, there is no guarantee the transaction will go through. This first proposal might not hold up. This may occur for a number of reasons, such as several house inspection problems, buyer finance, or just the buyer getting cold feet.
Deals frequently fail to materialize. Before a contract is signed, sealed, and delivered, a number of conditions must frequently be satisfied.
Watch this YouTube short for my take on how to handle multiple offers: