You may receive multiple offers for your house and one may be significantly higher than the others. You shouldn’t automatically accept the highest offer because it may have strings attached that won’t work for you. Someone who offered you a lower price may be able to close with less of a hassle.
Most homebuyers take out a mortgage. The approval process takes time and borrowers can hit a number of snags along the way. A potential buyer may not get approved for the amount needed or the house may appraise for less than the price you agreed on. If the buyer can’t make up the difference, the deal may fall through. A buyer who offers cash won’t have to clear any of those hurdles. It may be better to accept a lower price and not have to deal with additional stress.
If no one offers you cash, a preapproval letter is the next best thing. That means a potential buyer has gotten approved for a large enough loan to buy your house. A buyer who is preapproved and offers you less money may be more appealing than someone who makes a higher offer but doesn’t have proof of financing.
Sellers and buyers often want to close as soon as possible after agreeing on price. Sometimes, one party can’t do that or doesn’t want to.
You may have already moved out and may be paying two mortgages. If you’re eager to sell your old house, but a buyer can’t close right away, you may decide to accept a lower offer from someone who can close quickly. If you haven’t found a new house yet, or if you’re having your new home renovated and won’t be able to move in for several months, you may decide to accept a lower offer from someone who is in no hurry to get the keys to your current home.
Contingencies and Concessions
Buyers often include contingencies in an offer letter. Contingencies related to an inspection are common. A buyer may also want to make a purchase contingent on getting financing, having the house appraised for at least the asking price or selling their current home. If a problem arises in any of those areas, the sale can be delayed or may not be possible at all. A seller who makes a high offer may also ask you to throw in some big-ticket items that you weren’t planning to leave behind, such as appliances or a hot tub. You may choose to accept a lower offer from a buyer with fewer contingencies and requests for concessions.
Some potential buyers write a letter to a seller explaining why they want to buy the house and how they picture their family living there. If you received two or more similar offers, an emotional connection with one family may be the deciding factor.