We recently worked with a seller who owned a rental property in San Diego that he was looking to part with. He had relocated out of state for his job and no longer wanted to deal with the responsibilities of being a landlord (especially one who is absent). He gave us a call to explore his options in selling and to get more information. We gave him an all-cash offer after learning more about the property, and he said that he needed time to mull it over. After four months, he called us back to move forward with the offer that we had previously presented. But, what he didn’t tell us then was that he had listed the home after speaking with us initially because he thought he could get a higher sales price for the home (which we completely understand and support). But, after listing the home and receiving a few offers, he quickly realized that the “ticket price,” while higher than our cash offer, also included a long list of requested repairs and closing costs that he would need to cover. After comparing the profit he’d make from accepting a traditional buyer’s offer and the cash offer we’d be able to give him for the home as it stands, he decided that a traditional buyer wasn’t for him after all. Choosing the right buyer does require some prep and planning.
In some cases, we work with sellers who opt to sell on the market and they do in fact make a higher profit by selling to a traditional buyer versus selling to us. There is no “one size fits all” answer when it comes to picking the right buyer. The right buyer for you depends completely on your goals in selling, the condition of your home, and your strategy.
What’s Your Strategy for Choosing the Right Buyer?
Before you decide to sell, consider which strategy you will use when vetting offers (if there are multiple buyers). Are you going to simply take the first offer you receive? Are you going to weigh the pro’s and con’s of multiple offers before making a decision? Or, are you open to starting a bidding war amongst your pool of buyers? Whatever your approach, it’s best to think this over before you begin receiving offers. The more honest and upfront you can be with your potential buyers, the more likely they’ll be to stick around and be engaged in the process. If you say that you’re taking the first offer, for example, but secretly are brewing up a bidding war, a buyer may be turned off by your dishonesty and not want to enter a deal with you. Here are some additional items to consider when deciding which buyer is right for YOU.
Profit: Consider which offer from which kind of buyer will bring about the most profit. Some folks may opt to select the first, highest cash offer they receive, but we’d urge you to always dig a bit deeper. By taking offers simply at face value, you may be missing other key factors that could take away from your bottom line like the closing costs, cost of commission for your agent and potentially the buyer’s agent, as well as any buyer request repairs that you’ll need to make before closing.
Concessions: How many potential reductions and concerns does your buyer have? As mentioned above, just because the initial offer seems high, doesn’t mean that it will yield the most profit when all is said and done. Let’s face it, there are some buyers who will be more difficult to appease than others, and this could mean more and more money out of your pocket. You’re better off opting for a buyer who doesn’t have a laundry list of concessions for you to navigate, pay for and negotiate…all of which simply make the transaction more of a headache and can prolong the closing process.
Lenders: What kind of financing does your buyer qualify for? If your buyer’s offer looks great, but their lender or loan type isn’t the most “sturdy,” you could witness a buyer financing nightmare. While FHA and other loan types shouldn’t be disregarded, you should understand that with some types of loans, there is a higher probability of issues on the road ahead for your buyer to secure financing. If your home is in need of repairs, this can make it especially difficult for your FHA loan buyers to qualify.
Time: Time, aside from profit, is another huge factor in who you choose to sell your house to. If you have received two similar offers, for example, you may be more likely to opt for the buyer who can close in a few weeks versus the buyer who needs a few months to sell his or her home first. Coordinating the timing of home sales (especially in a housing chain) can be difficult, and it’s very common for buyer’s and seller’s timelines to interfere. Consider how flexible your buyer is in regards to the timing of the close- can they close as quickly as you need (guaranteed)?
If Your Right Buyer is a Cash Buyer
If you’ve developed a strategy that revolves around finding a buyer that can provide cash, close when you want, and doesn’t have a list of concessions for you…then selling directly to a reputable cash buyer sounds like it’s for you. If that’s the case, we’d be happy to speak with you to learn more about your property and your priorities in selling. The great thing is, you control the transaction and how you want things to flow. So, any hesitations associated with time, or maybe buyer financing, can be completely ignored.
If you think that listing your home on the market and entertaining multiple offers will get you the most profit for your home and aligns with your selling goals, we can help point you in the right direction for that as well. We know some of the best agents in San Diego County, and would be happy to connect you with someone we trust.Views: 8