In the final week of April, One + Company put 11 homes under contract.
Many of those homes had multiple offers.
You may be thinking: ‘How is that possible?’
Back in January and February, our local market, and many markets across the country, were experiencing low inventory. Low inventory is when there are fewer homes on the market than there are buyers.
In mid-March, many sellers decided to press pause on selling. According to a Flash Survey conducted by the National Association of Realtors, 51% of sellers are delaying their home sale by a couple of months.
What does this mean?
Now, there are even fewer homes for sale.
The sellers who needed to sell kept their homes on the market in April. And the buyers who need to move keep looking for homes. This is leading to some multiple offer situations.
If you get more than one offer at the same time, you may automatically think the highest bid is the best one.
But Purchase and Sale Agreements go far beyond a purchase price. Packed full of terms for the sale, it’s essential to read through the entire written contract, compare details, and ask your real estate agent if you have any questions.
Below are some of the terms to consider within the offers you receive.
Financing or Cash?
How does the buyer plan to pay for the home?
Although buyers are usually pre-qualified before they put an offer in on a home, there are still things that can go wrong with getting fully approved for a loan. If the person has recently started at a new job, for example, or if the home appraisal comes in lower than the purchase price, the lender may not approve the loan.
An all-cash offer means you don’t have to worry about any hiccups that could come along with financing. This speeds up the transaction process and leaves little room for something going wrong with the deal.
As a seller, you will also want to pay close attention to contingencies in the written agreement.
Financing contingencies, appraisal contingencies, and Hubbard clauses all change the terms of a deal. For example, if the buyer with the highest offer also has a Hubbard clause, it means they must sell their own home within a specified time period in order for your deal to go through.
A multiple offer situation isn’t always black and white. Always review all offers in-depth to determine, discuss your needs with your real estate agent, and determine what is the best option for your situation.