If you’ve been planning on selling a home, are you concerned that something might happen and then the whole deal might fall apart right as you’ve gotten the last box taped?
It may be a surprise, but the strongest offer is not always the one with the most money attached. That is a common misconception among buyers and sellers, and even a lot of agents.
I’ve learned from experience over the last 15 years that buyer offers need to be vetted. This includes reviewing motivation, terms, lender and loan strength, and even their agent. Here are more details on what I look for as a listing agent. I can then provide sellers all of the information they need to make a solid decision.
Motivation to Close
While it’s impossible to know with certainty how motivated a buyer is to close the deal, there are a few signs to look for. A lot of buyers submit “buyer letters” with their offer. The fact they made the effort is one signal of motivation.
Also, buyers often share why they want to move in these letters. Trust me, a well qualified buyer who has to live at a friend’s house during the buying process is likely more motivated than another who simply wants to live in a different neighborhood. Even if the second one offers a few thousand higher, the first has strong motivation to show up at the closing table (even a good friend’s welcome has limits). Even better if they are staying with family temporarily! Unfortunately, you may not always be privy to this information.

Terms of the Deal
Terms of the sale are important in a couple of ways. First, look for contingencies such as the sale of an existing home. This means the buyer needs to sell in order to close on your home – it’s like home sale dominos, and I’ve even seen them three deep. If one falls, the rest follow, killing the sale.
Other contingencies include appraisal and financing. These two are very common, but are being waived more frequently in 2020 due to the stiff competition. As a seller, the fewer contingencies the better.
Additionally, I look for terms that make the buyer have skin in the game early in the process, and enough to motivate them to stay with the purchase. A significant earnest money deposit (EMD), paired with short deadlines (when the EMD becomes non-refundable), shows commitment.

Loan and Lender
First of all, an offer with a pre-approval letter (or equivalent) isn’t a complete offer in today’s real estate market. Once offers are narrowed down to the final three or so, I interview their lenders. I call and I ask them two full pages of questions, plus I look at their reputation for closing deals. I want to know that they have already put the buyer through automated underwriting, and have received most if not all financial documents such as pay stubs, tax transcripts, and student loan balances. Basically, I want to know that they’re well into the loan process and that they just need an address to finance. That’s the buyer sellers want!
While I’m at it, I consider the reputation of the lender and/or loan officer. Do they meet deadlines and work to help buyers throughout the process? Are they responsive to calls and questions? When an offer comes in with an online lender without a solid reputation, I point this out to the sellers. Especially if I can’t reach a human when I call!
Is the Buyer’s Agent a Pro?
Agents can make or break a homesale. Most are professional and dedicated, but occasionally I run across one with a sour attitude or who seems disinterested. The first signal is if they’ve reached out before writing an offer to ask if there are any specific terms needed by the seller. This also gives an opportunity to gauge their professionalism. I also look up their record of sales in the MLS to gauge experience (I’ve worked with some great new agents. Experience is just one piece to add to others).
If you are selling an old home, it helps if the buyer’s agent is experienced with the common issues that crop up in vintage homes.

What to Do if the Offer Doesn’t Measure Up?
While there are many other nuanced considerations that vary by situation, these factors are the top four things to look for when evaluating a buyer’s offer. If one of them misses the mark, it’s not an automatic “reject.” Instead consider if a counter offer could close the gap.
If you have any questions about the selling process, please feel free to give me a call. I’m happy to help!