How to Choose Between Multiple Offers on Your Home in St. George

With such a high demand for homes in our growing area, it's not uncommon for homeowners to receive multiple offers when selling a home in St. George. If you're planning to sell your home, it's important to have a framework to guide you in selecting which offer is the best for you. Spoiler alert: it's not always as simple as just choosing the highest dollar amount. 

The Offer Price: More Than Just a Number

While it’s tempting to gravitate toward the highest offer, the offer price is only one piece of the puzzle. For example, a buyer offering significantly above the asking price may require a larger mortgage, which could increase the risk of the deal falling through if they fail to secure financing.

Experience real estate agent Greg Smith with Boulder Home Source explains, "The highest price isn't always the best offer when selling your home. A lower offer with fewer contingencies, stronger financing, or a quicker closing can often provide more security and peace of mind than a higher offer that carries greater risk or uncertainty."

On top of that, an offer that’s above market value may cause problems during the appraisal process by leading to an appraisal gap. If the home appraises for less than the offer price, the buyer might not be able to get a loan for the full amount, which usually leads to potential renegotiation or even the collapse of the deal.

Buyer Financing

You want to look not just at the numbers, but the information you have about the buyer that will indicate the strength of their financial position. A lot can happen between accepting an offer and closing, so whenever possible you want to select a buyer with the financial position needed to navigate potential bumps in the road. 

A pre-approved buyer is generally less risky, as they have already gone through the process of getting a mortgage approved. On the other hand, a buyer who is only pre-qualified might not have gone through as thorough a review of their finances, increasing the chance that they could have trouble getting a loan.

You may also encounter all-cash offers, which are particularly attractive because they eliminate the risk of financing falling through. Cash buyers don’t need to wait for lender approval, which can lead to a faster and smoother closing process.

Contingencies

There are other factors in the offer than may not affect the bottom line directly, but are still just as important as the financial aspects of it. We're talking about the contingencies and conditions in the offer. 

Common contingencies include the buyer securing financing, the home passing inspection, or the sale of the buyer’s current home. While some contingencies are standard and reasonable, others can complicate or delay the process.

A financing contingency, for instance, is common but can introduce risk if the buyer struggles to obtain a mortgage. An inspection contingency allows the buyer to back out of the deal or ask for repairs if significant issues are found during the home inspection. A home sale contingency, where the buyer’s purchase is dependent on selling their current home, can add considerable uncertainty and delay.

Depending on many factors in your unique scenario, we can help to advise you about which contingencies are worth accepting and which may not be in your best interest. This also greatly depends on the current market conditions, and we have all the updated knowledge in that area to help. 

Closing Dates and Flexibility

Consider your needs for your move-out timeline. If you need some flexibility, it may be worth prioritizing an offer that can give you that even if it's slightly lower. Let's say you’re selling your home and planning to move into a new one; you’ll want to align your closing dates. In some cases, buyers may even offer to let you rent the property back for a short period after closing, giving you time to transition smoothly into your next home.

Personal Offer Letters

Another feature you may want to consider is the offer letters some buyers will include. This can give you more information about the buyers, which we find is especially helpful to our sellers who really care about who moves into the home next. For example, if you love your neighbors and want to make sure the home goes to a valuable new member of the community, rather than becoming a short term rental, and offer letter might help you ensure this. 

If personal offer letters are included in some of your offers, we recommend that you read them carefully, but don’t let emotions completely dictate your decision. Focus on the financial and practical aspects of the offer, while keeping the letter in mind as an additional factor.

As your offers begin to roll in, we'll be with you each step of the way to evaluate the features in each and help provide our professional perspective. We are ready to help you find the right buyer for your property. Ready to learn more about selling your home in St. George? Contact us any time to get started.