After finishing minor renovations, investing in some curb appeal, and signing on with a fantastic Realtor®, you’ve listed your home expecting the offers to come rolling in.
But 20 offers?
You were not prepared for that.
Rather than choosing between a handful of offers but instead having to sort through over two dozen can be overwhelming. Let’s talk about what creates a seller’s market, how to choose a buyer when there are so many options, and how to capitalize on your biggest asset in a hot market.
What Does a Seller’s Market Look Like?
Are home prices up 30% in your area from last year?
Are there more real estate agents in your area than there are homes for sale?
Do you have three sales for every five listings in your market?
These are just a few of the signs that you’re in a seller’s market.
In a seller’s market, the inventory is low and the demand is high, putting homesellers in the driver’s seat for negotiations. Buyers, faced with few options, have to become creative about the offers they make.
Source: Pack First Properties
How Quickly Do Homes Usually Sell?
On average, homes across the country sell in 30 to 45 days. However, these numbers can vary significantly depending on location. If your neighbor’s house has languished on the MLS for months, but your sister accepted an offer on her house within 24 hours of listing it, then you understand that typical or average can change significantly based on location, price point, and the condition of the home.
Additionally, regions of the country with positive population growth, infrastructure improvements, and a thriving job market see homes with a marked decrease in time on the market. It’s best to consult with a local real estate professional for specific data about your housing market so you have an idea of how quickly your home will sell.
Should You Accept the First Offer?
“What’s wrong with the house on the corner?”, you wonder as you drive past it. When a house sits unsold for weeks (or even months) beyond the average sold date, buyers will start to wonder why.
While you don’t have to accept the first offer you receive, holding out for a better offer well past when the initial excitement over your listing has faded means risking a stale listing. You don’t want to miss your window of opportunity because you held out for “the perfect price”, and now buyers think that there’s something wrong with your house.
In a hot seller’s market, passing on the first offer could result in a bidding war, and who doesn’t love the idea of getting 15% over the asking price?
Again, navigating a fast-paced market with a trusted Realtor® can help you avoid some of these pitfalls.
How Should You Choose a Buyer If You Have Multiple Offers?
Does a contingency offer put the buyer at a disadvantage? It might, especially if the contingency makes the offer less competitive. Financing contingencies, inspection contingencies, and home sale contingencies have the potential to tie up a house sale, and a buyer who waives all contingencies increases the chances of a smooth transaction.
An all-cash offer removes the tricky financing issue that a contingency offer has, but sometimes an all-cash offer can be as much as 12% lower than a financed offer. If you wait for additional offers that have traditional financing, you may end up with more money.
In a hot market, buyers might put a time limit of offer into the contract. This injects urgency into the negotiation process, and you might feel pressured to quickly accept or reject the offer. If you just listed your house, it may be a good idea to wait for other offers, especially if your real estate agent knows that more money is possible.
An offer review date is a time limit (typically 3 to 7 days after the listing date) that you and your listing agent include in the listing. The offer review date gives buyers time to make an offer, and it gives you time to weigh all of your options without the pressure of a buyer’s deadline.
What Do You Need From This Sale?
Choosing from multiple offers is difficult when buyers offer different amounts, have different contingencies, and bring different financing options to the table, but identifying what you need from the sale can help you sort through offers.
- How quickly do you need to sell your house?
- Do you need a certain amount from the sale?
- Are you interested in making repairs to the house?
- If you accept the offer and it falls through, will another offer come through?
- Are there any contingencies that you need?
As you consider the plethora of offers, you’ll also want to keep in mind what’s important to you. Take a minute and prioritize whether time, convenience, or money matters more. Then you’ll be able to separate out the offers that meet your needs.
The Bottom Line
So is there really such a thing as having too many offers?
Sure, it can be stressful to weigh all of the offers against each other. After all, 15 offers with varying price points and contingencies are not apples-to-apples comparisons.
However, if your goal is to sell your house at a great price so you can move onto the next stage of your life, then a seller’s market with its deluge of offers is always a great spot to be in.
