Selling a home isn’t just about finding a buyer — it’s about choosing the right offer.
While the highest price might seem like the obvious winner, other factors like contingencies, closing timelines and buyer financing can make or break a deal. Before you sign the contract, here’s what every seller should review to ensure a smooth, profitable sale.
Evaluate the offered price
The highest bidder is often the winner. But there may be other things to consider, depending on your circumstances.
- Is this over or under your asking price?
- If over, great!
- If under, by how much? Is this your only offer?
- Does it align with recent sales in your area?
Verify buyer financing
You will want to ensure buyers are able to pay the amount of money they have offered for the home.
- Is the buyer preapproved or prequalified for a loan from a credible lender? Ask for a statement of approval. If only prequalified, consider asking them to get preapproval.
- What is the loan type: conventional, Federal Housing Administration or Veterans Affairs? Have your real estate agent review loan approvals.
- Did they provide proof of funds or a down payment?
- Cash offers? Verify proof of funds for cash offers.
Consider contingencies
When you have multiple offers, you likely will want to take the highest offer, but that is not always the best offer in the end. Start with comparing prices, but then check out the contingencies to see what aligns with you.
- Home inspection: This is common for buyers to request to have the home inspected for issues. If issues are revealed, the buyer will likely request repairs, negotiate credits or walk away from the sale. Sellers can get a pre-inspection to uncover problems early or decide how much you are willing to negotiate on repairs.
- Appraisal contingency: Lenders might request an appraisal to make sure that the home’s value matches the offer price. If the home is being overvalued, then the buyer might ask to lower the price. Be careful when pricing and be prepared to negotiate.
- Financing contingency: This protects buyers if they are unable to secure a loan. Even preapprovals fall through, so if their financial situation changes and the loan is not granted, this contingency allows buyers to back out.
- Sale of another property: For buyers who are also selling a home, they might have this contingency to ensure they are able to sell their current home before closing on the new house. This can get complicated, but look at their timeline and if their home is close to being sold as well.
Review earnest money deposit
Earnest money deposit is money buyers put down to indicate how serious they are about buying a property. This deposit is held in escrow until the house is closed on.
- Amount offered? Typically, people put down 1% to 3% of the sale price.
- Is it competitive for your market? In more competitive markets, more earnest money could indicate a more secure sale.
Consider closing timeline
It’s imperative that the closing timeline works for you. If you are still looking for your next home while selling yours, the goal is to line up the closings so that there is very little overlap. If you sell the home before you find a new place, you could rent, but the cost of moving and storage can add up quickly.
- Does the proposed closing date fit your needs?
- Is the buyer flexible if delays occur?
- Would they consider a rent back agreement?
Look at additional terms
Outside of contingencies, buyers may request other details like who pays for closing costs. Who will cover the cost of repairs is another key detail to iron out. Be sure to include what will stay in the house, like refrigerators, laundry and other large appliances.
- Requests for seller concessions?
- Home warranty included?
- Personal property included/excluded?
Assess buyer’s motivation
Determining the buyer’s motivation to buy your property could help you gauge how willing they would be to negotiate. If they have a stricter timeline, then they might be more willing to concede on a few negotiations. If it’s an investment property, then maybe the buyer is less willing to negotiate.
- Is this a primary residence or investment?
- Any signs of urgency? Relocation?
Backup offers
- Backup offers: Buying and selling is complicated. If you have multiple great offers on a home, it can be hard to choose. You could accept a backup offer if you are concerned about the first buyer backing out or the deal falling through.