How to Choose the Right Buyer for Your Home
Congratulations! You have received multiple offers on your Florida or Alabama real estate market listing. But which offer would be the best one to select? In this edition of our blogs, FlatFee.com has some helpful reminders about what you should look for when accepting a potential buyer's offer on your Flat Fee MLS listing.
As with any major sale that involves legal aspects, you should consider having a real estate attorney review the offers you receive and to help guide you through the process. Choosing the right buyer and offer for your listing can be tricky, and laws vary from state to state.
In the Fine Print
Read the received offers for clauses and contingencies very carefully. Be sure to check for any conditions that you did not agree to in your verbal conversations or that may be problematic, such as time frames or numerous repairs that you did not agree to when you listed and showed your MLS listing. Also be sure to take note of the time which you have to respond to the offers. Usually, if you do not respond in that time frame, the offer becomes void.
Can They Actually Afford to Buy a House?
Evaluate the amount of money the buyer is offering, and review if it is cash or loaned by a lender. If it is loaned, do they have a pre-approval or do they have a commitment letter from the bank? What is the difference?
A mortgage pre-approval letter is written by a loan-officer but they cannot approve loans. They create mortgages to acquire new clients and are responsible for making sure that everything that must be done to close a loan is actually completed.
Who you really want a letter from is the Loan Underwriter. This person makes sure that the borrower fits the Lenders Guidelines for Approval and is the person to approve or deny the loan. A loan commitment letter is the document you are going to look for when a buyer makes an offer on your home. This letter will itemize all the conditions for the loan to purchase of your home. including an expiration date and is a formal and legally binding contract from that lender.
Speak with the buyer or their representative about the title company that will perform the settlement services. Usually, the buyer chooses the company and you of course would like to be confident and comfortable in the title company's ability to bring the transaction to a successful close. Again, be sure to look through all the fine print and have a real estate attorney to help you.
Other General Considerations and Tips
Now that we have covered the difference in the loan-approval letters that you will be seeing, we do have a few other tips and considerations for you to remember:
Determine if the buyer's offer on your MLS listing is contingent on the selling of their home.
- Remember that after signing a contract, the agreement becomes legally binding and would be troublesome to get out of without consequences.
- Be sure to double check the potential buyer's ability to actually purchase your home,
- (often referred to as creditworthiness) before entering negotiations.
- Carefully consider all stipulations. There are many buyers that will include escape clauses into a contract that will let them walk away from the deal easily.
- • Consider using the offers you receive as a bargaining chip to attract more desirable but slower-moving buyers. You could tell them that you have already received offers, but wish to give them another opportunity to purchase your home. Remember that your MLS listing is drawing buyers but each contract is valuable and may be counter offered with better terms for you.
- Do not let the amount of earnest money the buyer has put down be too large or a factor in your final decision. Sellers tend to gauge the seriousness of the buyer on these grounds, but that may not always mean the buyer can truly afford to purchase your home.
In summary: You have attracted many buyers but you need to be careful and take many aspects into consideration when accepting the offers that have come your way. We hope that these tips will help you choose the right buyer for your home.
