Does someone make an offer on your house in Birmingham in Oakland County, Michigan? Evaluating home offers can sometimes be tricky, especially if it’s your first time or you have received multiple offers. Perhaps, the predominant idea that goes through your head is to accept the highest offer. But there are things you must consider other than the offer price. 

In this blog post, you’ll know what to do and how to evaluate offers from potential home buyers. 

Do Your Research and Be Prepared

Before putting your real estate property on the market, you must prepare for the whole process. Arming yourself with sufficient knowledge on what to do when a prospective buyer offers a price on your home is crucial. This way, you’ll know whether to accept or reject the offer. 

Know what to expect after you get that price offer on your house. It will be a significant help if you’re familiar with the key terms of the Purchase Agreement and the meaning of each section. This legal document stipulates the terms and conditions agreed by both seller and buyer in the sale of a real estate property. 

You can download a Purchase Agreement form online to learn about the terms and components of this document. Typically, the Purchase Agreement will specify the price, deposit, date closing, etc. 

As a seller, you should know the most crucial aspects of the sale. Do you prefer a home buyer who agrees with the closing date within your timeline? Is getting a higher price on the home your top priority? Whatever your preference, you should identify your priorities and work on them to help you decide whether to accept or turn down the offer. 

Factors You Must Consider in the Evaluation

There are three crucial factors to look at when evaluating a price offer on your house: the amount, qualification of the buyer, and closing date. 

Price Offer

The price offered by the buyer is probably the most crucial factor in the home sale. However, you need to know a few things that may affect your earnings in this transaction. 

• Closing costs. There are closing costs that the buyer and seller must cover, such as the commission of the buyer’s agent and listing agent. As a seller, you also have to pay the title policy, title insurance fees, recording fees, HOA transfer fees, home warranty fees, and escrow fees. You can talk with the buyer to pay for the portion of these fees to maximize your sale proceeds. 

• New Survey. Lenders will request a survey on the property before approving the buyer’s loan application. Title insurance companies will also require a survey. If the seller doesn't have an existing survey, a new survey needs to be done. You and the buyer can share the survey expenses, or the buyer will ask you to pay for it altogether. Make sure to discuss this cost with your buyer. 

Qualification of the Buyer

Another thing that you must consider is whether the buyer is qualified to purchase the house. Many buyers typically get a home loan for the purchase, while others are willing to provide a cash offer. Check if the buyer is financially secure to afford the costs of the home purchase. Take note of these indicators that the buyer is a qualified buyer. 

• Down payment. See if the buyer is willing to pay a higher down payment percentage. A down payment ranging from 20% to 50% of the price is a good indicator that the buyer is financially qualified. 

• Pre-approved by the lender. If the buyer is pre-approved, it means that the lender has reviewed his/her income and credit. Being pre-approved is an excellent sign that the buyer is qualified for the home purchase.

• Earnest Money Deposit. If the potential buyer is ready to make an earnest money deposit, it’s an indicator that he/she will purchase the house. The buyer won’t be able to take this deposit if he/she decides to discontinue the deal. 

Closing Date

The closing date is a crucial aspect of the home sale. Make sure that the closing date aligns with your timeline. There are circumstances that you may want to stay in the property for some time or move out of it as soon as possible. 

Talk with the buyer if he/she is willing to agree with you regarding the closing date. If you need to hold off on moving, perhaps the buyer will agree to a leaseback. 

Takeaway

Every seller of a real estate property in Birmingham in Oakland County should know how to evaluate offers. It's crucial knowledge that can significantly help you in the home sale process. For instance, certifying the qualification of the buyer and maximizing your sale profit. Always make an informed decision whether to accept or turn down offers on your home.