So it’s an insanely hot, super savvy seller’s market. Try saying that three times- super savvy seller’s market. It’s so crazy right now if you’re selling your house. We’re seeing sellers get multiple offers on their homes, so it can be super confusing and exciting all at the same time. I totally get it. Just this week alone, we had two sellers accept offers, and we had multiple offers on each property.
Hi, everyone. I’m Michele Irizarry, CEO and broker of Shore Prime Properties. So how do you know what offer to choose? Is the highest offer always the best offer? Well, if you’re wondering or possibly considering selling your home, then listen in.
Many sellers think that the highest offer is always the one they should take. Well, the highest offer doesn’t always mean that it’s the best offer, and let me explain why. If there is a loan involved and a buyer offers you an insanely high price for your home, you need make sure that the home will actually appraise at the contracted price.
Why does this matter? Well, because the bank will only loan based on the appraised value. Let’s break that down into layman’s terms. If the buyer offers $650,000 for the home and the appraised value comes in at $640,000, the bank will only loan on the $640,000 price, so there is a difference of $10,000. That means that the buyer would have to come in with a difference. So understand the buyer still has to come in with their closing costs, down payment, and possibly have enough money in the bank for reserves, in addition to coming up with an extra $10,000 to cover the difference in the appraised value.
So how does this pertain to the seller and why do they need to protect themselves? Here is one of the things that we do here at Shore Prime Properties. What are the best options for a seller is to counter a no appraisal contingency, meaning that the buyer will pay the difference between the appraised value and the purchase price. When you’re doing this, make sure number one, that they have the ability to pay the difference. Number two, they will still have enough money to qualify for all the fees associated with the purchase. And number three, they actually really understand what that means.
There are a lot more issues to be concerned with when this happens, and I’ll be here all day explaining things. I know I just said a lot of mumbo jumbo, and you shouldn’t have to worry about all of this stuff. And trust me, there is a lot more. So to make sure you end up making the amount of money you originally and mutually agreed upon when selling your home, call us here at Shore Prime Properties, and we’ll do all the negotiating for you and make sure it’s clean and easy.
Stay tuned for more tips on making sure you get the money you think you are when selling. I’m Michele Irizarry, selling prime real estate at the Jersey Shore.