Multiple buyers waging a bidding war on a newly-listed home is, in many ways, the ideal scenario for most sellers. The solution seems simple - choose the one who offers the highest price and call it a day, right? Not necessarily.
In a fast-paced market, multiple offers on homes in good locations are fairly common, and there are several ways you can make these dynamics work for you rather than against you.
First, do your research. Sit down with your realtor and ask them questions about the current climate of the market. How quickly are homes selling once listed? What does the average selling price look like these days? Are sellers typically closing at or above asking price?
All of this information will then help you determine the listing price, the most important factor in facilitating multiple offers on your home. Starting too low might snag you a quick sale, but will leave you feeling like you could’ve gotten more. Pricing too high could mean sitting on the market and later being forced into dreaded price reductions. When the market is hot, multiple offers most often occur when the listing price is just slightly below average for that type of home. Once the offers come pouring in, you’ll be able to push the price point above average pretty easily.
Then, you need to make sure you have the basics in place. Your home must be in good condition, cleaned, staged, and marketed well. You and your realtor might consider such tactics as taking professional photos of the home and building a dedicated webpage featuring it, or holding open houses and agent tours.
Let’s say you’ve successfully listed your home for just the right price, and now you’re juggling multiple offers. How do you choose? It’s not always as simple as the highest dollar amount. You want to consider the quality of the buyers themselves. What does their down payment look like? Are they pre-approved for a loan? It’s critical to be sure your buyer’s finances are in order.
The sky, however, is not the limit. In a bidding war, the absolute best offers will typically be free of contingencies. You should reconsider choosing the highest dollar amount if closing is contingent upon the sale of the buyer’s house, for example. Another factor to keep in mind is the appraisal process. If your home doesn’t appraise well, you’ll be forced to either lower your price or pay out of pocket for improvements.
In the end, the best offer on your home will be a balance of price, few or no contingencies, and the probability of a smooth closing process. Armed with knowledge and confidence, you can facilitate and preside over the price battle and become the undisputed winner in the sale of your home.