Okay, I wrote that headline to get your attention.
The amount of an offer obviously matters, but it’s not everything. In a sense it is not the most important thing.
What should matter to sellers is the quality of the offer, and that depends on several factors.
With good reason, an all-cash offer is one that commonly triumphs over a higher number with financing. Today more than ever, lender requirements can delay final loan approval for weeks and months beyond the anticipated closing date. And underwriters have been known to sabotage a transaction beyond repair all too frequently at the eleventh hour — literally.
That’s why it is wise to embrace a buyer with cash in a bear hug, and most sellers these days have been demonstrating their flexibility by doing so.
Other sometimes overlooked concerns related to competing offers include these:
- Are the seller’s and buyers’ closing dates not only compatible but unaffected by circumstances such as an anticipated bonus, home sale or gift?
- Are there aspects of the buyers that will cause a co-op board’s rejection of their applications — animals, family size or composition, occupation, second seemingly primary residence, among myriad others?
- Are the buyers’ financial statements credible and verifiable?
- Does one buyer seem more motivated than the others and, therefore, less likely to back out?
In other words as a friend and broker, J. Philip Faranda of Westchester, has pointed out, greater weight should be given to certainty than to price.
It is understandable that a price higher than others can blind a seller, but it is folly to ignore the many ways in which an offer can push a transaction off the tracks.
Should there be a train wreck, sellers often find themselves in a position to pay dearly with a property perceived as stale along with the amount of time and money wasted before other offers come in. Those offers may end up having even lower prices than previously and being of quality that is questionable.
When in doubt, risk-taking sellers would do well to become risk-averse ones.
Tomorrow: Down-payment insurance
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022