What Home Sellers Should Know
The Lafayette and West Lafayette Indiana residential real estate markets have been very strong for sellers the past few years. It is not uncommon for a seller to receive multiple offers shortly after listing the property for sale if the property is priced correctly. It’s important to have a professional real estate agent representing you in the sale to help you determine the strength of an offer. This is especially important when comparing and evaluating the relative strength of multiple offers. It’s not always just about the price!
Here are just few factors in addition to the purchase price you should consider when evaluating a written offer to purchase your home.
- Cash vs. Loan – Cash is king! A cash offer is preferred as it simplifies the transaction and removes several risk points that could derail a purchase. This greatly increases the chances of a successful transaction.
- Lender – Not all lenders, loan officers or pre-approval letters are created equal. Real estate agents have deep experience working with a wide range of lenders. An offer backed by a high-performance lender with a robust pre-approval process is much more attractive to a seller. It provides confidence that there won’t be any surprises with financing that could jeopardize the sale.
- Contingent Offers – Some offers may be contingent on the completion of another transaction. The most common contingency is when a buyer must close on the sale of their existing home in order to have the funds to complete the purchase of their new home. There is a significant risk to the seller since they are now depending on the successful closing of the buyer’s sale and all the points of risk therein.
- Concessions – The top line price is reduced by the any concessions asked for by the buyer. If a price of $350,000 was offered, but the buyer asks the seller to pay for $3,000 of the buyer’s closing costs, this is a $347,000 net offer.
- Earnest Money – This like a security deposit provided by the buyer. In the Greater Lafayette area market, it is customary for the buyer to provide about 1% of the offer price. Although this will sometimes be capped for larger transactions. A small earnest money deposit might be a hint that the buyer doesn’t have a strong balance sheet. The deal might come apart if the buyer doesn’t have the money required for their due diligence items (home inspection, appraisal, etc.), closing costs or necessary repairs after closing. You can read more about the importance of earnest money here: What is Earnest Money?
- Closing Date – Perhaps the seller values a specific date or time period for the closing (completion) of the sale. This is a common non-monetary term that can sometimes be very valuable to a seller or a buyer. The right closing date could mean the difference between a frantic move against a deadline or a smoother and less anxious transition.
These are just some factors to consider when evaluating or writing an offer. Having a professional real estate agent at your side is crucial to making wise and informed decisions throughout the home selling and home buying process. Contact Us today to have the Nexus Realty Group help you buy or sell your home.
About the Author - Don Stocks is a real estate broker with the Nexus Realty Group at Coldwell Banker Shook in Lafayette, Indiana. He specializes in representing buyers and sellers of residential real estate in and around Lafayette and West Lafayette, IN (Greater Lafayette). His professional experience includes Fortune 50 Enterprises, high-tech / IT startup ventures and early stage strategic management consulting. He holds an MBA and a BS in Management from Purdue University. He lives in Lafayette, IN with his wife Ronda and his son Adam. When he's not real estate-ing, he enjoys reading non-fiction, hanging out with is family on their sailboat “Andiamo” and sailing on Lake Michigan.