You are selling your home, and of course you want to receive a great offer so you can move on with your life.
This post is not about how to attract the right offers – although that’s certainly an important subject for another time – but what to look for in the offers you receive. While I say offers, that’s because in our area many sellers are getting more than one, except in the higher price ranges. The reality is you may only get one offer, and that’s ok.
Offers are submitted on a standard form here in California, and there are some important things to look for and think about. After all, if you are going to sign off on a contract you had better read and understand what you are signing.
First, I recommend you obtain a copy of the forms we use beforehand so you are familiar with what you will need to review. Many agents provide this to their sellers (I do) but if not you might want to ask.
Date of closing – closing might be requested by a specific date, or within a certain time frame (commonly 30 days from acceptance). This, of course, is negotiable, but having an agreed upon time frame once the offer is accepted is important for all parties – seller, buyer, escrow and in particular the lender.
Current Pre-approval – you absolutely need to see a letter from a qualified lender that details that the buyer is pre-approved for a loan based on a review of their credit, assets, income and available cash, and has the funds for the down-payment as well as closing costs. A letter that is more than 30 days old would be suspect in my mind, since circumstances can change for buyers (e.g., their finances, interest rates). It’s easy enough for a lender to update a buyer’s financials and produce a current letter.
Proof of Funds (POF) – in the case of a cash offer you certainly want to see proof the buyer has the cash available for buying your home plus closing costs. This can be a current bank statement or a letter from their banker. Anyone can submit an offer for cash but it needs backup documentation, and your agent should review this as well, and may even contact the buyer agent for additional information or clarification.
You may want to consult with your listing agent about whether to ask for a POF for buyers who are getting loans. As with a pre-approval, you want proof of funds that is current, not a 6-month old bank statement. And be sure the bank or other financial organization is listed, along with the buyer’s name(s) and the names should match the names on the offer.
You want to be sure the offer is appropriately signed and dated. Your agent will no doubt also check this. Everyone makes a mistake now and then, of course, but lots of mistakes can you one a bit worried about the other site.
If there are multiple offers you are likely to see differences in price, terms and conditions, but also in how well prepared and complete they are. Any issues that you have concerns or questions about should be discussed with your agent.
You, of course, are not expected to be an expert about real estate contracts…your agent is…and thus there should be a good dialogue between you and your agent about any questions or concerns.
While the decisions you need to make about accepting an offer and its terms, or countering offering, are yours, your agent should provide some guidance about the pros and cons of an offer, point out particular things to consider (e.g., dates, earnest money amount, requests for a termite inspection and needed repairs, requests for appliances to remain, the home warranty amount, etc.) and help you make the decision that is best for your personal situation.
Check out my video series (21 short 1 – 2 minute videos) on my YouTube Channel on How to Sell a Home.