Warning sign! Just because an offer price is high doesn't mean you will retain the most money

Warning sign! Just because an offer price is high doesn't mean you will retain the most money

Qualifying a buyer is essential to bringing a solid transaction together to make sure you retain more money. 

This may surprise you, but just because the offer price is the highest doesn't necessarily mean you will retain the most money. We thoroughly examine all of these items when considering offers which can play into total net profit.

  1. Review Offer Terms: Begin by thoroughly reviewing the terms of the offer submitted by the potential buyer. This includes the purchase price, earnest money deposit, proposed closing date, contingencies, and any other terms outlined in the offer contract.

  2. Evaluate Buyer's Financial Qualifications: Assess the buyer's financial qualifications to determine their ability to secure financing for the purchase. Review any pre-approval letters or proof of funds provided by the buyer to ensure they have the necessary funds to proceed with the transaction. We will call the lender to understand what kind of pre-approval they have been put through. Some lenders offer pre-qualifications and others offer full pre-approval. 

      1. Pre-Qualification: Pre-qualification is an initial assessment based on information provided by the borrower regarding their income, assets, debts, and credit history. It gives borrowers a general idea of how much they may be able to borrow and what their potential monthly payments could be. Pre-qualification does not involve a thorough review of the borrower's financial documents and is not a guarantee of loan approval.

      2. Pre-Approval: Pre-approval is a more formal process where the lender verifies the borrower's financial information and creditworthiness. Borrowers typically submit income documentation, bank statements, and other relevant financial documents to the lender for review. Pre-approval provides borrowers with a conditional commitment from the lender to provide financing up to a certain amount, pending appraisal and other underwriting requirements.

  3. Consider Contingencies: Evaluate any contingencies included in the offer, such as financing, appraisal, inspection, or the sale of the buyer's current property. Determine the feasibility of these contingencies and their potential impact on the transaction timeline and your seller's goals.

  4. Assess Buyer's Motivation: Consider the buyer's motivation for purchasing the property. Are they a serious buyer who is genuinely interested in the property, or are they submitting an offer on multiple properties as part of a speculative approach? Understanding the buyer's motivation can help gauge their commitment to the transaction.

  5. Communicate with Buyer's Agent: Reach out to the buyer's agent to gather additional information and clarify any questions or concerns regarding the offer. This may include discussing the buyer's financing, timeline, contingencies, or any other relevant details that could impact the transaction.

  6. Present Offer to Seller: After conducting a thorough examination of the potential buyer and their offer, present the offer to your seller along with any relevant insights or recommendations. Provide your seller with a comprehensive overview of the offer terms, buyer qualifications, and any factors that may influence their decision-making proces

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