Home Sellers: What to Consider in a Multiple-Offer Scenario

real estate multiple offers

It’s practically the dream situation for home sellers: You put your house on the market, and you quickly receive multiple purchase offers. It’s not uncommon in a seller’s market, where there are more buyers than there are homes for sale, and it gives the seller leverage.

How you proceed with that leverage is up to you. You could simply accept the offer with the highest purchase price. You could counter-offer each prospective homebuyer, prompting a bidding war that will likely drive up the price. Or you could feel out each bidder, pulling the levers that will benefit you the most.

It’s an enviable position to be in, but deciding to simply accept the highest offer might not always be in a seller’s best interest. If you’re a home seller, here’s what to consider in a multiple-offer scenario.

Cash is king

The old saying is that a bird in the hand is as good as two in the bush. That adage can certainly apply when it comes to any real estate transaction.

The large majority of home purchases that fall through do so because of financing. A lender might make demands of the buyer that they can’t meet. Or the lender sets standards for the property that you might not be willing or financially able to meet.

But cash offers on your property remove the lender from the equation. An offer that’s contingent on financing hinges on more parties. A cash offer eliminates the possibility that there will be some mortgage-related snafu. If mitigating the risk of an agreed-upon purchase is important to you, a cash offer for your home should be weighted accordingly.

Even if you don’t have an all-cash offer, potential bidders with more cash could be valued higher than others. A buyer who can put 20 percent down is less likely to fail the financing hurdle than someone who’s putting 10 percent down, as a higher down payment might mean the difference between qualifying and not qualifying for your purchase price. You might not be immediately privy to a buyer’s cash-on-hand position, but it’s worth trying to ascertain, and a savvy buyer’s agent in a competitive multiple-offer situation might be eager to divulge it.

Timing is everything

Nobody enjoys making multiple mortgage payments, but it’s not uncommon. If the purchase of your next home is set to close in, say, 30 days and the buyer of your current home wants a 90-day closing period, you could end up making two months’ worth of payments on two properties.

Conversely, if your home sells quickly – before you’ve found your next one – a quick close could mean you don’t have a place to readily move into. That could mean moving your possessions twice, renting a storage facility, or moving into your mother-in-law’s basement indefinitely.

As a seller in a multiple-offer scenario, you have leverage. That leverage includes dictating the timeline of events as it pertains to closing and move-in dates. An offer with a price that isn’t quite as high as another might have more value if it involves flexibility that accommodates your preferred timing.

There are other contingencies

The financing contingency is the biggest pitfall to successful real estate transactions, but there are others that can play a big role, too.

Homebuyers are protected by other contingencies, such as appraisals and home inspections. A buyer who is willing to waive their right to a home inspection or an appraisal might be more attractive to sellers than one who is not.

Waiving a home inspection means a buyer can’t back out simply because an inspector found some sort of deficiency in the home. Waiving an appraisal contingency can mean that if the home doesn’t appraise for enough to meet a lender’s approval for a loan, the buyer can bring more cash to the table to square things.

It’s prudent for any seller to at least consider a buyer’s willingness to waive contingencies when weighing multiple offers.

The bottom line

When selling a home, receiving multiple purchase offers is a great position to be in. But there are a few things to consider beyond just the face dollar value of each offer.

Virtual Home Staging in the Time of Coronavirus (and Beyond)

virtual home staging for house sales

With all of the changes that we’re currently adapting to, one thing that may be on hold right now is hiring a home stager to come in and do hands-on work in your home. Many of us are adopting a lifestyle that’s as contact-free as possible, and even when stay-at-home orders are lifted we may be much more selective about when and how we interact. In other words, the coronavirus era may permanently alter our ways of doing things, and virtual home staging is here to stay.

Home staging can be done in such a way that you have minimal contact with your stager, since meetings can be done through Zoom, contracts can be viewed and signed online, and when it’s time to do the work you can arrange for it to be done without contact.

However, if you’re looking for a completely remote way to get expert staging advice, you can use an online home staging consultation or you can opt for virtual staging.

Virtual Home Staging

Virtual home staging didn’t even exist when I got started in this business. Over time, it has become a very sophisticated service that involves beautiful results that can be difficult to discern from actually staged rooms. In other words, it’s come a long way from the early stages of Photoshopped-looking “green” lawns etc.

Now, virtual staging companies like this one offer a highly personalized service that’s affordable and honestly produces some truly stunning results. The down side is that once the buyer decides to view the home in person, you’ll obviously lose the effects of the staging. But now more than ever, buyers are doing as much research as possible online before they ever decide that a home is worth seeing in real life. With this service, you can get four rooms staged for $300, which is a fraction of the cost of actual staging.

Online Home Staging Consultation

Another option that you might consider is an online consultation. In this model, you’ll get all of the advice and expert instructions directly from a professional stager, and then you will carry out the changes DIY-style on your own schedule. With this method, you can opt to make only the biggest bang-for-your-buck changes or you can go through and follow every bit of advice.

In my experience in working with home sellers working this way, it typically takes a weekend or two of knocking out some easy staging projects. The results are usually very impressive. The fees are a fraction of what you’d pay for a stager to come out and do an in-person consult and get the staging work done.

Final Thoughts

To wrap-up, either one of these options can help you get the most out of your home if you’re getting ready to sell. Of the two options, virtual home staging is definitely the most convenient because the work is all done for you – virtually. The downside is that once buyers come to view the home in person, the reality will not match the pictures they’ve already seen. However, they have already seen the potential, and that good impression obviously motivated them to come and view the home in person.

If you have any questions please send an email to us via our contact page and we’ll be happy to help.