How to Evaluate Multiple Offers as a Seller, Beyond the Highest Number

How to Evaluate Multiple Offers as a Seller, Beyond the Highest Number

Almost every seller I work with assumes the same thing once multiple offers come in. Take the highest price and you're done. Sometimes that's exactly right. Other times, the highest number on the page is actually the riskier offer to accept, and the seller doesn't find that out until three weeks into the contract.

An offer is more than a price. It's a set of promises about how smoothly the next month and a half is going to go. Here's what I actually walk sellers through when more than one offer lands on the table.

The deposit behind the price.

In Massachusetts, a buyer's initial deposit comes in with the offer, and a larger second deposit typically follows once the Purchase and Sale Agreement is signed. A buyer offering a strong price with a thin deposit is telling you something different than a buyer offering the same price with a meaningful one. The size of that deposit is a real signal of how committed that buyer actually is to getting to closing.

How the contingencies are written.

Almost every offer includes some version of an inspection and financing contingency, and there's nothing wrong with that. The question isn't whether contingencies exist. It's how they're written. A tight, clearly defined inspection window reads very differently than a vague one, and a financing contingency with a firm commitment deadline that is timely is a typically what we look for as opposed to a commitment date very close to closing. The offer with the cleanest contingency language is often the one with fewer chances to unravel later.

How solid the financing actually is.

There's a real difference between a buyer who's pre-qualified and a buyer whose financing has already gone through underwriting. A fully underwritten buyer has far less risk of a financing surprise mid contract, even if their offer price is a little lower than a buyer who hasn't gotten that far yet. This is usually the single biggest factor in whether a transaction closes smoothly or falls apart in week three.

Closing date fit.

The highest offer doesn't help you if the closing date doesn't work for your actual plans. Sellers who need extra time to find their next home, or who'd benefit from a rent back arrangement to stay a few weeks past closing, should weigh a buyer's flexibility on this almost as heavily as price. The right date can be worth more than an extra few thousand dollars on paper.

How the offer reads overall.

An offer with a lot of extra tasks, unusual terms, or odd deadlines tends to signal a transaction that's going to take more work to get through. A straightforward offer, even at a slightly lower price, is often the safer choice, because you're not just picking a number. You're picking who you're going to spend the next month and a half with. 

None of this means price doesn't matter. It's usually the first thing sellers look at, and it should be. But the offer that closes without drama is worth more than the offer that looks best on day one and falls apart on day twenty.

If you're getting ready to list and want to talk through how to compare offers when they come in, I'm always happy to walk through it with you.

617-970-5144

Warmly, Jenna Levin