Not only do you want to look at the highest offer, but you also want to look at the terms.
Is it a cash offer? Is it contingent on financing? If it’s based on getting a mortgage, what kind of a mortgage is it? Is it conventional with 20% down, 10% down, or 5% down? Is it FHA or VA?
You want to know how much they’re putting down as a down payment. Usually, the more that they are putting down, the stronger sign it is that they’re most likely getting their mortgage without any issues. You also want to look at the deposit money. If they’re putting their complete down payment as a deposit, that is a great sign. That means that they are serious and they are less likely to walk away for no reason.
The other thing you want to look at is the closing date. Does it work for you or are they flexible on it?
You want to look at the inspection terms, have they shorten the window for inspection? If they do, that’s great because if for whatever reason it falls apart, you haven’t been that long off of the market. You can go back fairly quickly or you could go back to one of your back up offers.
Have they waived any portion of the appraisal or have they waived it completely? Some people offer to do it just for informational purposes which means that they are not going to ask you for any credits or repairs. Some people offer waiving the first $1,000 or $2,000 worth of issues, and some people will just limit them to some major items only.
The next thing to look at is the appraisal contingency. The appraisal contingency is only if there’s a finance contingency because it is required by the lender. If it is a cash offer, you don’t have to worry about it, but the appraisal, if they’ve offered a good amount and you’re not sure if there are any comps for it to appraise like if you’re fairly certain that it is not going to appraise, think if they have waived the appraisal. Waiving the appraisal means that they are going to pay the amount that they’ve offered regardless of what the appraisal comes in or have they offered a bridge appraisal? Like they could say that they can pay $10,000 over whatever it appraises at, regardless.
Then the last thing you want to think about is, are there any additional contingencies? Like, is this contingent on them selling a house? That’s really important to know. And if it is, where are they in the process? Have they listed it? Are they under contract? Have they remove their inspection and their appraisal contingency? The farther along they are, the less risky it is for you.
The last thing I always do, too, when I don’t know the lender or if I’ve never heard of them, I call them and ask who they are and the company and make sure that we’re going to the closing table with minimal headaches.
Those are my tips.