Multiple Offers on a House: 7 Tests to Select the Best

However, Taranto says there are situations when sellers may want to consider accepting a contingent offer.

“As the market has gotten softer, we’re accepting more contingent offers based on if it seems reasonable, and if it seems like we’ve been having trouble selling a house,” he explains. “If it didn’t sell the simple way and we’ve got a contingent buyer who really loves the home, we will consider the offer, and I’ve had successful situations where we’ve done it.”

Test 3: Largest escrow deposit

White says the earnest money deposit often signals the buyer’s seriousness, but it’s just one ingredient in the recipe for a strong offer.

“You want to look at a couple of different factors, the buyer’s financing, how much money they’re putting down, what type of loan they’re doing, and then weigh any concessions that a buyer might be asking for,” she advises. “It depends on the seller’s [circumstances] and what they are trying to accomplish.”

But when comparing these factors within multiple offers on a house, a larger escrow deposit typically shows that the buyer is committed to following through with the purchase. This can give you more confidence that the buyer won’t back out of the deal.

Test 4: Strongest buyer financials

While a large down payment might impress you, it’s important to consider the broader picture of the buyer’s financials. An experienced listing agent can help you assess potential risks before accepting an offer.

“Essentially, we’re trying to psychoanalyze the buyer,” Taranto says. “If I can see a signal that the buyer is tight for money just from the way the offer is written, then that’s not a good sign. What if there is a repair that needs to be done that the seller doesn’t want to do or can’t afford to do now?”

This can lead to a buyer asking for seller credits or concessions, which can reduce your proceeds or even kill the deal. “We don’t want to get our seller tied up with [an offer] and then realize that it really wasn’t a highly qualified buyer,” Taranto says.

Pre-approval from a lender, high credit scores, and a solid debt-to-income ratio are all signs of a financially strong buyer. These reduce the likelihood of issues during closing.

Test 5: Most convenient closing date

The closing date can impact your selling timeline, especially if you’re coordinating a move or buying another home.

Taranto offers an example. Let’s say you have multiple offers on your house, but you need the funds from the sale to move and purchase your new home. One of the offers is less money, but the buyer is willing to allow you post-occupancy so you can stay in the house for a month after closing.

“All offers being equal, I would love that offer if it made a big difference for my seller,” he explains. “It can be a game changer, even if [my seller] needs to accept a little bit less money for that to happen.”

White agrees. “In this market, we’re seeing more situations where a seller may need to stay in the home after closing, so a buyer who will let a seller stay with no rent back might work well for a seller.”

Test 6: Cleanest purchase offer

A clean purchase offer is free of unnecessary conditions or complications. It’s straightforward, making it easier to navigate the sale. Clean offers often come from buyers who are serious and ready to move quickly, which can make your selling experience much more efficient.

“If you have a buyer who comes in with a grant, then there are different parameters that go along with someone who’s getting money from the city,” White says. She adds that sometimes an offer not only seems complex, it might just not feel right. “We have a gut for a reason. Go with what you feel good about.”

Taranto agrees. “We’re looking for a lot of signals based on all the information that we have.”

Test 7: Experience of the buyer’s agent

When it comes to deciding between multiple offers on a house, this seventh test is often overlooked by sellers. Researching the experience of the buyer’s agent can make an offer stand out or provide a red flag to help you avoid delays, hassles, or a canceled sale.

“If there are two offers that are equal, but one of them has an agent that’s difficult, that’s an important factor,” Taranto explains. “If they’re asking for concessions or they seem like they’re going to be nitpicky right upfront, I don’t want to choose them. They’re going to be even more nitpicky after the home inspection.”

On the other hand, Taranto notes: “If someone seems very reasonable, very simple, very straightforward, and really wants the house, I’m going to lean toward that one.”

The experience of your listing agent is also important when it comes to handling multiple offers on a house.

“Choose your agent wisely,” White advises. ”Make sure they are knowledgeable because that goes a long way with negotiations. Make sure that they are verifying funds and talking to the lender, and make sure that they’ve been in the business and know what they’re talking about, and can articulate what you’re looking for from the sale of the home.”

Other considerations with multiple offers on a house

Even after you’ve evaluated the dollar amount, contingencies, and buyer financials, here are a few other elements to keep in mind when choosing the best offer.

Is a cash offer always best?

Cash offers often stand out because they eliminate the need for financing, which reduces the risk of the deal falling through due to a mortgage denial. Cash buyers can also typically close faster, which might be appealing if you’re on a tight timeline. However, a cash offer isn’t always the best choice. Sometimes, a financed offer with fewer contingencies or a higher price could be a better overall deal.

Is the buyer asking you to pay their Realtor fee?

New commission rules have changed how Realtor fees are handled. In the past, sellers would pay both the listing agent and buyer’s agent commissions. Under the new model, buyers negotiate the commissions directly with their own agents. However, some buyers may still ask you to pay these fees. Depending on your financial situation and the strength of the offer, you may want to counter this request or move on to another offer.

Should you present a counteroffer?

If no single offer checks all your boxes, a counteroffer may be a solution. You can negotiate aspects like price, contingencies, or closing dates to better meet your needs. Just keep in mind that countering might push some buyers away, so consult with your agent and weigh the risks before going down this path.

Should you consider a buyer love letter?

Real estate love letters are personal notes from buyers hoping to sway your decision emotionally. While they can be compelling, it’s essential to remember that fair housing laws restrict decisions based on personal characteristics. Buyer letters can also pull your focus away from the actual merits of the deal.

“If I’m working with Joe, and Joe is 75 years old, and he needs every penny he can get, and his goal is to maximize this sale proceeds for the rest of his life, I feel strongly that I don’t want him to be manipulated in any way by a love letter from a buyer. It’s very tempting because some people want to be friendly.” He adds that the narrative of a letter may not be 100% true.

Instead, he and White both advise sellers to consider only the merits of the offer and select the one that combines the highest proceeds with the benefits that fit your selling objectives.

Is the offer too good to be true? (scam alert)

If an offer seems unusually high or comes with promises that sound unrealistic, proceed with caution. Scam offers do happen. Be wary of any buyer asking for sensitive information too early, offering to buy your house without visiting it in person, or making other suspicious requests. A trustworthy real estate agent can help you vet offers and spot any red flags.

A top agent will attract the best offers

“If you’re interviewing an agent, dig deep into how they handle multiple offers,” Taranto suggests. “Have them tell you about real-life multiple offer situations that they’ve had in the past and how they handled them. There are many agents who literally will take that first offer because it’s the easiest. It’s more work to hold out for a better deal.”

Need help finding the right agent? HomeLight’s free Agent Match platform connects you with top-rated real estate agents in your area who have experience with multiple offers on a house.

Taranto offers this closing advice: “Be patient. Do not be too quick to make a decision. Let it take the time that it takes — nothing crazy — and work with an agent who’s good at the process and who’s good at figuring out which of these multiple offers is the one that you should go with.”

Header Image Source: (Emily Barrington/ Unsplash)