There are several buyers interested in your property. At a closing date, your solicitor is sitting on multiple offers and you have to decide which one to accept. It seems pretty straightforward that you just accept the highest offer – or does it?
It’s not always the case that the highest offer is the best one. A great offer means nothing if it falls through.
In practice, your solicitor should guide you through the pros and cons of each offer and these are the sort of factors they are likely to discuss with you to help you make your decision.
Firstly, are any of the offers from cash buyers or do all of the interested parties have a property to sell before they can buy yours? The biggest risk of an offer falling through is that the buyer has trouble selling their current property, therefore, a buyer with cash can be a much better bet. If the difference in the offers between a cash buyer and someone who has to sell before they can buy is not huge, then a cash buyer can often be a very good choice.
If all offers are from buyers who have to sell, or if the offers from cash buyers are so low compared to the others that you would prefer not to accept them, do any of these buyers already have their current property on the market? It takes time to put a house on the market, so a buyer who has already gone through that process should be ready to move sooner. They should also have a better idea of the demand for their existing property and so greater confidence that they can sell successfully.
If all your prospective buyers have a property to sell, where are their properties located? In all property markets, some locations are more popular than others therefore an offer from a buyer with a property to sell in a popular area is clearly going to be more attractive than an offer from buyers with a house to sell somewhere less popular.
As well as selling their existing property, will any of your buyers need a mortgage? Most buyers will have a rough idea of how much they can borrow (and their solicitor will want to check their finances before submitting an offer), however lenders will only agree a mortgage on a specific property and only after they have checked the circumstances of the borrower in more detail. It’s rare, but lenders can say ‘no’, therefore an offer from a buyer more likely to have their mortgage application accepted could be more attractive than a higher offer from someone who would have to stretch their finances to go ahead.
Finally, there’s the question of timing. Do you need to move quickly (there’s somewhere you want to buy) or would you prefer to take your time? If you want to move quickly and the highest offer is from a buyer who only wants to move in months later, then a slightly lower offer from a buyer who can match your sense of urgency would have a lot of appeal. Conversely, if a buyer wants to move in as soon as possible and you are waiting for your next home to be completed, that can create tension which might risk the sale – especially if completion of your next home is delayed for a while.
It’s great to have multiple offers and, when it comes to it, an experienced property solicitor will be able to guide you through the advantages of each one, but just bear in mind that the highest figure is not always the best offer!