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    In today’s red-hot market, multiple offers aren’t just common — they’re downright expected.

    With historically low inventory, ever-rising home prices, and hordes of hungry buyers out there, most sellers receive several bids just hours after their listing goes live.

    But choosing which bid to go with doesn’t just mean looking for the highest number. In fact, picking the highest bidder may actually hurt your buyer in the end.

    Want to help your sellers evaluate offers and hone in on which one is the best for their needs?

    1. Know the market

    Once you know what the market is like, you can assess your options.

    If the market is a buyers’ market and there are several houses on the market, consider how long your house has been on the market and how many offers it’s had. Is it priced below other comparable homes in its area? If so, that could be an indication that sellers may not be willing to pay the list price.

    In today’s seller’s market—which means there are fewer homes for sale than people wanting to buy them—you might want to see if any other houses in your neighborhood have sold recently before deciding on one of the multiple offers.

    This will give you an idea of what prices are like in your area right now as well as whether or not other properties are selling quickly (which may mean yours could sell at a premium).

    2. Review all offers at the same time

    When you have multiple offers on your house, it’s important to review all of them at the same time.

    There will likely be a variety of loan terms, contingency scenarios, closing periods, and financing variables.

    Reviewing all of these details against one another will make the decision more clear.

    3. How much are they offering?

    One of the most important things to consider when choosing between multiple offers is how much each offer is worth. This doesn’t mean that you should accept the highest bid, but it will give you a good idea of what each buyer thinks the house is worth in comparison to other houses on the market.

    When comparing offers, look at factors such as:

    • How much do they think this house is worth?
    • How much do they want to pay for this house?

    4. What loan type are they using to finance the purchase?

    Does the buyer have a conventional or FHA loan? FHA loans require down payments as low as 3.5% and credit scores of 580 or even lower, meaning buyers might not be as financially stable as you’d like.

    Conventional loans are a little harder to come by, with stricter credit score and down payment requirements.

    Buyers with these types of loans are usually less likely to pull out of the deal due to financing issues.

    5. Do they have a mortgage preapproval?

    Mortgage preapproval is a good sign. It means that the buyer has been approved for a certain loan amount, which means they’re serious about buying your house and have their finances in order.

    In this market, there’s no reason to even consider an offer if the buyer hasn’t been preapproved for a loan yet.

    Not only is it risky to the sale, but it could also potentially set back your move weeks or even months. If the buyer backs out because they can’t secure financing, it’s back to the drawing board with staging, showings and negotiations.

    Do your sellers have the time for that? Better yet, your sellers should be keeping an eye out for buyers that are Approved to Move™, which means they already have a full approval.

    6. What lender is financing the home purchase?

    If the buyer has been preapproved, who is their lender?

    What is that lender’s reputation?

    Dig in and do a little research as to how quickly they typically close loans, how smoothly their closing process goes, and if buyers often encounter hiccups along the way.

    You want your sellers to pick as sure a bet as possible, so choose buyers with solid, trustworthy lenders that have a reputation for excellence.

    7. How much earnest money is being put down?

    Buyers put down earnest money to indicate their good faith in the offer proceeding as stated. If the buyer backs out before the sale goes through, they lose that earnest money — as well as the home.

    Though there’s no required minimum when it comes to earnest money, the more a buyer is willing to put down, the better.

    Higher earnest money deposits indicate they’re serious about the home and that they’re willing to stake their own hard-earned cash on the deal going through.

    8. What contingencies are part of the deal?

    Be sure to look at any contingencies buyers are including in their offers, such as home inspection, appraisal, and financing contingencies. In today’s market, many buyers are waiving contingencies in order to secure the home and beat out the competition.

    If you’re in a multiple-bid situation, consider waiting for an offer that waives them — particularly the appraisal contingency, as this one often equals the most losses for a seller.

    9. Are concessions being requested by the buyer?

    Are any of the buyers requesting concessions?

    Things like closing costs, portions of the down payment, included appliances or other items? These are all things that can cost your sellers in the end. Just like contingencies, you may be able to wait for an offer that waives all concessions, especially in a multiple-bid scenario.

    If you do consider an offer with concessions, make sure it’s a fixed amount, so your sellers know exactly what choosing that bid will cost them.

    10. Did any of the offers include a personal letter?

    Many buyers are including personal letters with their offers in order to stand out from the crowd.

    They may share their personal plight with becoming a homeowner, they might talk about their family, job or service to the community, or they may just try to appeal to your sellers’ emotions.

    Ask your sellers up front if they want to consider personal letters when evaluating offers.

    11. When do they want to close?

    What is the estimated closing date on all the offers? This can be a major determining factor in your decision. If you need to move quickly, getting an offer on your current house before the buyers make an offer may be important.

    If you’re not in a hurry but want to save some money, waiting until the end of their timeline may help you get a better price for the house since there will be less time for people to check out the property and negotiate with you.

    If your current home doesn’t have much equity or isn’t worth much (you’re upside-down), then getting a buyer who wants to pay cash could be helpful; otherwise it may not matter as much if they are paying cash or financing with a mortgage company as long as they’re willing/able-bodied enough to close within 3 months or less!

    Bottom line, if your sellers are on a specific timeline for when they want to be out of the house or into their new one, make sure you’re looking carefully at the closing dates on each offer. These will vary greatly depending on loan type, lender, and other details.

    Talk with your sellers about their ideal closing date, and help them hone in on which offers can get them there.

    12. Can you work with the real estate agent who’s representing the buyer?

    Last, but not least, can you work with the real estate agent who’s representing the buyer?

    It’s important to know whether or not you can work with the real estate agent who is representing the buyer, because they will likely be your point of contact throughout this process.

    • How long have they been in business?
    • What is their reputation, and how many homes have they sold?
    • Are they well-regarded by other agents in the community?

    These are all questions that may indicate a potential issue down the road. You also want to make sure that any paperwork or requests made by your agents will come through them so that there isn’t confusion about who said what or when.

    Choosing the Best Offer Isn’t Always Easy

    Getting multiple offers on a home is great news for you and your sellers — but it does mean a little extra work in evaluating and analyzing your offers.

    Make sure you and your sellers are clear on the end-goal and that you’ve discussed priorities in timing, loan type, contingencies, and concessions. The more you know ahead of time, the easier it will be to spot potential winning offers as they come in.

    When your sellers are ready to start shopping for that new home, send them our way. An Embrace home loan officer can help.

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