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Consider the following points when you receive an offer from a potential buyer:
Read beyond the fine print.
Purchase price isn't everything. Carefully consider the purchase contract's other terms and conditions. Too many contingencies can leave loopholes and cause a deal to collapse. Especially avoid contingencies that favor the buyer, such as linking the escrow closing date to the buyer's sale of their current home. If the buyer insists on such terms, include a so-called kick-out clause* in the contract that will allow you to consider other offers if the buyer is not able to sell within a certain time period.
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Assess your buyer's financial qualifications.
Is the buyer pre-approved? How much of a loan is the buyer seeking? Unless you're in an active market, lenders tend to shy away from underwriting a deal in which the purchase price is higher than the nearest comparable sale and the buyer is putting less than 10 percent down. If this is the case, your buyer may not be able to obtain financing, resulting in lost sale time.
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If you don't want to completely reject the offer, ask to extend the time you have to respond, or signal your concern about financing. This will encourage the buyer to acquire more funds or give you time to consider another offer.
Know the market.
How you judge an offer also can depend on market conditions. If the market is slow (a buyer's market**), you may feel vulnerable, especially if circumstances are pressing you to sell. Make sure any offer you accept doesn't keep you in escrow longer than 30 days. In a fast market (a seller's market***) where multiple offers are likely, be wary of countering more than one offer at a time (you could end up in legal trouble if two buyers both accept your counteroffer). Also be wary of offers that promise more money but contain poor contract terms (long escrow, multiple contingencies). In a fast market, it's wise to wait for the best offer
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*Kick-out clause - A clause in a sales contract that allows a seller to accept one buyer's contingent offer, then back out without penalty if a second buyer makes a better offer.
**Buyer's market - A slow real estate market in which buyers have the advantage.
***Seller's market - A hot real estate market in which sellers have the advantage and multiple offers are common.
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