5 Ways To Know If You Received a Good Offer or Not

By Danae Aballi

Danae Aballi is a long-time real estate industry veteran. She has worked in various positions in the industry having grown from an independent real estate agent to running a team of 5 top producing agents.

How do you know if an offer is good? If you’re a seller, I bet you’d look at the price first. However, differentiating between a good and bad offer does not depend on just the price. There are five key factors to every offer that you’ll either rate on the buy side or review on the sell side.

1. Price. One of the first things that people pay attention to when they write or receive an offer. Price is the top line, but you also need to look at the bottom line of what you’re actually going to net after expenses. This perspective can significantly influence your decision-making process.

2. Terms. When examining the terms of the offer, you need to consider two things. First, the title company and escrow company being used. This matters because it affects the net bottom line amount since they are all expenses a seller may have to pay.

Second are the financing details. How much will the buyers pay in cash compared to financing it via loan? This matters because, for instance, a buyer looking for 97% financing may not have enough money for unexpected expenses like a major car repair. This can cause the whole deal to go sideways because they have to apply that money to the car repair instead of closing escrow.

3. Buyer’s agent capability. When it comes to a smooth transaction, don’t overlook the competency of the buyer’s agent. If you have a buyer’s agent on the other end of the deal and you’re a seller who receives an incomplete or incompetent offer, your entire escrow process will not be smooth because you’re dealing with someone inexperienced, and they may give the buyer bad advice.

If you’re a buyer looking for representation, you need someone skilled and qualified because you may not even know why your offers are being rejected or not considered. It might be due to your representation.

4. Contingencies. Check your offer for any contingencies from buyers. Typically, a buyer will have three contingencies related to home inspections, loan approval, and appraised value. All three need to be cleared for the deal to proceed.

The offer will be much stronger if a buyer can waive any of these. It’s a different story if you are presented with a fully underwritten loan from the bank, making it a much more attractive scenario than one that is not. However, be careful of complicated contingencies, such as a buyer needing several months to sell another property, as these can complicate the offer more than a straightforward one.

5. Timeline flexibility. There are scenarios where a seller may need a fast escrow to receive their cash, perhaps because they are relocating for a new job. There are other times when a seller, who may be expecting a baby, prefers that the escrow is a little longer so they don’t have to move with a newborn. In some cases, sellers may want to accept funds but remain in the home for an additional 30 to 60 days after closing.

Knowing what to look for when evaluating an offer can prevent regrets after closing. If you need guidance about your real estate transactions, you can reach out at any time. My contact details are (949) 216-8565 and danae@danaeaballi.com. I’d be happy to assist you.