BLOG: Why home sellers shouldn’t always pick the highest bidder
A national shortage of properties on the housing market means that those that are listed are selling quickly, often with multiple offers from buyers keen to quickly secure a sale. In a seller’s market, choosing the strongest offer isn’t always about the highest price. There are a number of factors that you have to consider in order to assess which offer stacks up best and minimise the risk of a deal collapsing.
It’s important to find out what situation each of your potential buyers is in, as this will affect how likely they are to follow the offer through. Your estate agent should be able to let you know the circumstances of each person making an offer on your property. Sellers should also take their own circumstances into account, such as when they would like to move and see if these match with the buyer’s requirements.
The chain that buyers are involved in is a major consideration when weighing up offers. Generally those with no chain, such as buy-to-let and first time buyers, are in a strong position and it may be worth accepting a slightly lower offer as these buyers are less likely to drop out at the last minute. Cash buyers are also a good bet as they can move quickly and don’t have the red tape that involving a mortgage company brings.
Below are some tips for sellers choosing between multiple offers:
1. Make sure that your estate agent gives you a summary of each potential buyer’s circumstances; including their timescales, health of the chain that they are in and their level of interest.
2. Look at each offer and how it is being funded – the size of deposit that a seller can put down will influence the likelihood of the deal going ahead. Those with a deposit of 25% or more will be the most secure.
3. Assess how interested each buyer is, those who seem to love your property and have an emotional attachment to it will be more likely to stick with the sale and not change their mind.
4. If you need to sell quickly, with the lowest risk of the sale falling through, then offers with no chain or a cash buyer may be the best option, even if the offer isn’t quite the highest that you have received.
5. Finally, if you really can’t decide between buyers with similar offers consider going to ‘final offers’. Your estate agent should be honest with the potential buyers and let them know that a small increase will put their offer in front and secure the sale.
Russell Bennett is an estate agent and co-founder of Houses.co.uk, a new online estate agency