How do I choose the best offer when selling my home?
The highest offer might not always be the best offer. There are other factors to consider when choosing which buyer's offer to accept.
It's not just about price
1-in-3 home sales fall through in England and Wales after an offer is accepted.
Delays in the conveyancing process are a major contributing factor to abortive sales. The longer the conveyancing process takes, the greater the likelihood of the buyer's circumstances (or those of other buyers and sellers in the chain) changing. A change in the circumstances of your buyer, or any other party in the property chain, could jeopardise your sale.
If you have multiple offers, choosing a buyer who is less likely to bring delays can make a critical difference. Your choice of buyer can mean the difference between a fast and stress-free process, and a protracted sale that might ultimately fall through.
Each offer will have its pros and cons. The highest offer may not be the best offer in the broader context of the buyer's circumstances:
A chain-free buyer won't be reliant on their own buyer or, as with some property chains, multiple other buyers and sellers in order to purchase your home. An offer from a chain-free buyer is comparatively attractive as your sale won't be exposed to problems that might occur anywhere else in the chain.
Delays are also less likely with a chain-free-buyer - a key consideration if you are in a hurry to move.
Knowing their chain-free status to be attractive to sellers, buyers may make a lower offer. Depending on your circumstances, however, the benefits may more than offset the lower offer.
If your buyer is obtaining a mortgage, there are a number of risks that add uncertainty. For example, the lender might:
- not be prepared to lend to the buyer
- not be prepared to lend on the property
- down value the property
- withdraw their offer if the buyer's financial circumstances change
Waiting for a formal mortgage offer can also slow the conveyancing process down - increasing the risk of problems due to delays.
An offer from a cash buyer has obvious advantages. Better still an offer from a chain-free cash buyer.
Buyers who need to sell
Buyers are more likely than not to be part of a chain. Buyers in a chain need to sell their property in order to buy yours and they know they may be competing against a chain-free buyer. A buyer in a chain might, therefore, make a higher offer as an incentive for you to wait for their sale to go through.
If you can afford to wait, you may find you secure a higher offer by negotiating with a buyer in a chain.
The first-time buyer
First-time buyers coming from rented accommodation or from the family home, are also chain-free.
However, first-time buyers don't have a home to sell to raise capital and have never had a mortgage. Most first-time buyers will be dependent on securing a mortgage to fund their purchase. Ask the first-time buyer if they have a Decision in Principle (DIP) from their mortgage lender.
Talk to your estate agent
Once you receive an offer, make sure your agent gives you a full and clear picture of the prospective buyer's circumstances.
The agent can obtain the following information from the buyer when they make an offer:
- If the buyer is a cash buyer
- If the buyer is in a chain and if so, how long is the chain
- If the buyer has sold their own property
- If the buyer is in a hurry
- Any other information that will strengthen or weaken a buyer's offer
With this knowledge, you will be more confident in your negotiating position. There is (usually) no hurry to accept an offer. If you have any reservations, your agent can relay these to the buyer who may be willing to make a higher offer.
Regardless of a buyer's profile, a buyer's initial offer is likely to be lower than your asking price, so be prepared to negotiate in any event.
How can Quittance help?
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