With the coronavirus pandemic still spreading far and wide across the United States at an ever faster pace, many homeowners are seeing increasing competition from home buyers of all shapes and sizes as they battle it out in bidding wars over limited housing inventory in a market full of movers.
As someone looking to sell your home, you might be forgiven for thinking that “the highest offer is always the best offer,” but is this always the case?
At first, such sky-high offers on homes by buyers might sound great, but you really need to dig a bit deeper and answer a couple of key questions before making a judgment call on such offers. Seeing the FULL PICTURE on any home offer is critical in finding out whether or not the deal is really worth making.
Let’s take a look at a few instances where selling your home to the highest bidder is not necessarily the best option for you and your pocketbook.
Before we get started, though, let’s look at all the primary components of any offer to buy a home.
Primary Components of Home Offers
- The Purchase and Sale Agreement – this is a written contract that provides you with an overview of the offer and spells out a number of key details related to the transaction, including the offer price, the identities of the property and the parties, the closing date, any associated closing costs, and which companies will be used to handle any escrow as well as the title.
- A copy of the legal description of the home (which comes as part of the title report).
- Contingencies – any time two or more parties make an agreement to buy a home, a variety of conditions come into play that have to happen in order for the deal to be successfully executed.
While there are a ton of different contingencies that can arise depending on the property, the following are generally two of the most common contingencies you’ll see in a purchase and sales agreement:
- Financing/appraisal contingency – this contingency provides for the event that the home buyer is unable to secure the necessary financing needed to close the deal. Luckily, with “cash for houses” companies such as NOLA Home Deals, you don’t have to worry about this!
- Inspection contingency – inspection clauses within property contracts typically outlines an inspection period (for sales to cash buyers, this is usually valid until the end of the closing period) during which time the buyer can back out. However, such clauses are typically not needed if the property for sale is already run down or in dilapidated condition.
Situations where accepting the highest offer makes sense
Successful home sales typically hinge on actually making it through the entire real estate transaction without experiencing any hiccups that trigger any of the contingencies above. This might work well in a situation where the seller has all the time and effort necessary to wait out to sell to the highest bidder, but this also puts tremendous pressure on the seller to ensure everything goes smoothly. Otherwise, the whole deal can fall apart.
Situations where the highest offer isn’t the best offer
There are certainly a whole lot of situations where people need to sell their home FAST, and under these cirumstances, waiting patiently for the highest offer definitely is not the best deal for you.
- Buyers paying top dollar take their timeAny buyer who is paying top dollar for your home is almost guaranteed to require a lot more contingencies than an all-cash buyer. These deals will include a ton more in terms of vetting the property, lining up financing, and more. When your future is on the line, you simply don’t have time to wait and need to sell now.
- Traditional financing with a mortgage is slow and uncertain
Another reason accepting the highest offer for your property can be a bad deal is because the kinds of buyers willing to pay top dollar also are usually buying the property with a conventional mortgage. This type of financing often takes awhile, and in the case of someone on the brink of foreclosure or other personal loss, time is more valuable than money. You need someone who can close quickly.
Want a fast offer on your New Orleans-area home?
If you have a home in the New Orleans area that you need an offer on fast, don’t hesitate to call NOLA Home Deals today. Whether or not you sell your house to us, we’ll provide you with useful advice to help you navigate whatever situation you suddenly find yourself in.
Call NOLA Home Deals at a (504) 882-3477 or send us an email to get started on your fast, free, all-cash offer now!