Being a home seller can be awkward from time to time. You’re required to let a lot of people you’ve never met explore your home, judge it, and then come to you with offers for how much they believe the property is worth to them. In order to try making the whole experience a bit easier, we’ve put together these 5 tips for evaluating offers for your house in Moreno Valley.
1. TREAT IT AS A BUSINESS TRANSACTION
Going through the home-selling process from beginning to end, it’s extremely important to remember that this is ultimately going to be a business transaction.
The memories you have tied to and the personality you have given the home aren’t likely to matter any to a potential buyer. Keeping that in mind, all correspondence and negotiations should be treated exactly as they are: business.
If you don’t feel an offer is what you’re looking for or a potential buyer decides to get aggressive in a way that makes you uncomfortable, be willing to walk away. This is your home to sell, and you need to do it on your terms if at all possible.
2. REVIEW THE BUYER’S OFFER – EMD, DOWNPAYMENT, AND OFFER PRICE
Once the offers for your house start to roll in, you will want to start picking them apart in a few different ways. While it’s very easy for a seller to get caught up in the total amount offered by the potential buyer, there are more ways to analyze an offer. You want to make sure you’re getting the full value you want from a given offer.
The first thing to do is break down the total on offer into earnest money and downpayment. Earnest money is the money presented upfront as a sort of deposit to the seller to show it’s a serious offer. If no earnest money is provided, that may be the trigger to take a more critical look at other offers that have come in. The down payment is the amount of money the buyer is setting aside to pay for the home immediately upon closing and is another indicator of a buyer’s interest.
3. REVIEW BUYER’S PRE-APPROVAL LETTER, PROOF OF FUNDS, AND DU APPROVAL
Last, a mortgage pre-approval letter and proof of funds is important, but also ask to review a copy of their DU (Desktop Underwriting) approval. These documents let you know that the buyer has done their due diligence and made sure they have the funding available here and now if you decide to accept their offer and get the ball moving toward closing in the coming weeks. An experienced listing agent will know what to look for in a DU approval and this is even more important than the approval letter since it shows that a lender has thoroughly reviewed the buyer’s finances and has obtained an automated approval, making this buyer a better candidate to close escrow.
4. CONTINGENCIES – INSPECTIONS, APPRAISAL, AND FINANCING
After you sort out the serious offers for your house based on finances, take a look at any contingencies attached to those offers. Some offers for your house will ask for specific repairs to be done – often to bring things up to code – and other offers may ask for a home warranty to help protect them in the event something goes wrong after purchase.
Each offer will be a little different, and it’s up to you to decide which of these contingencies you feel are reasonable. In the event you are looking to accommodate repairs in a buyer’s offer, you should do everything you can to get those repairs done in about a week’s time so you don’t hold things up too much.
Most offers will request an appraisal contingency to protect the buyer in case the home does not appraise for the offer price. In the hot market we are experiencing, it’s common to see borrowers bidding $5,000, $10,000, even $20,000 above list price to get an offer accepted, but the appraisal contingency protects them. In these cases, look for a buyer that not only offers above list price, but that has funds available to cover a gap between appraised value and their offer price, or that volunteer to pay a certain amount “above appraised value” should the home appraise for less than what they offered.
5. WHEN TO CLOSE
Finally, setting the closing date can be a very important detail. Some buyers may request a specific date or tight timeframe for closing due to their circumstances, and you may do the same as a seller. It comes down to you both accepting a time frame with which you are both comfortable. On your end, you need to figure out how much time you need to find your “upleg” home – that’s industry jargon for the home you’re going to buy – or time to pack if you’re relocating out of the area or to another state.
Feel free to decline or walk away from an offer that does not feel realistic or comfortable to you.
Get More Offers for Your House in Moreno Valley
Taking a look at your incoming offers will now be a bit easier with our 5 tips for evaluating offers for your house in Moreno Valley. If you are looking for help getting more of these offers or evaluating the ones you get, contact us at (951)331-3315!