Selling a home, deciding between 2 offers

A question for anyone tired of reading about whining 3rd Gens issues or 3" leveling kits or "will 285s fit my stock prerunner?"

Selling my home and deciding on final two offers. Both are about 1.5% more than asking. Here are the factors:

• Buyer A is offering more but is having his brother-in-law take out the loan. The brother-in-law is also in contract on another home near by but they're putting down 25% and he has shown proof of funds.

• Buyer B is a contractor and spent quite a bit of time taking measurements and asking questions. My wife took a liking to him (not like that you perverts!) and thinks we should sell to him even though he's offering $2500 less. He's co-signing on a loan with his bother and is putting down 20%.

Both buyers a forgoing an inspection and are ready to go to contract. Lets say both made the same offer, which one is more solid? Buyer A who's having someone else take out the loan or Buyer B who's co-signing? Maybe neither matters and I should take the higher offer?

$2500 does buy a nice OLED TV and home entertainment system!

 

I doesn't matter as long as you aren't loaning them the money. Go with the higher offer and the TV.

 

ok. no inspections...any other buyer conditions?

 

Not yet and not expected. Once the offer is accepted my lawyer will write up the contract and we move forward.

Conditions of sale are that we need 90 days to close with the option to rent back the home for an additional 2 months after closing. (Both buyers are okay with this.) We want to let our 5 year old finish out the school year and we still need to find a new house ourselves.

 

In my world, nothing gets accepted until the contract is signed. Based on the information I have, if the money is the same, I would suggest that you make 2 contracts, with each being conditional upon the other. First one to go unconditional wins. Your lawyer should be able to help you with that.

 

@Protosimian
I'm confused. You're suggesting I go to contract with both buyers? Is that possible? I'm pretty certain if one backs out of signing a contract then the other buyer will jump at the sale, at which point we can write up a contract with him.

Am I wrong to assume I can have a contract ready and signed within 3-4 days. Figure it shouldn't take long considering we don't have to worry about an inspection.

 

Yes, it's possible if you have appropriate conditions. If you are in a seller's market, you will have more leverage, if you are in a buyer's market, you will have less. If you plan to accept more than one offer, it must be on the basis that once a certain set of criteria have been satisfied, you will make one contract unconditional, to the exclusion of all others. If you are in a jurisdiction where lawyers clear title, your lawyer will be able to help you with this; if you are in a jurisdiction where title insurance companies clear title, then you need to follow their lead.

These kinds of conditions are often characterized as 48hr or 72hr conditions...Google it.

And, good luck TW friend!

 

Really, and I don't think that I've made this clear, if you have 2 deals that you can live with, that's great. But, I think that you should put yourself in a position, contractually, where you don't commit until one of the buyers do. If you are in a buyer's market, however, you probably need to make it work, however it happens.

 

Has your agent cross referenced the potential buyers? Buyer A doesn't sound like much of a strong buyer if he is saying his brother in-law is taking out the loan, and is also in another contract. Buyer B sounds like the stronger offer. He has a co-signor, which isn't entirely bad in of itself, and appears to be going with a 20% down conventional loan.

A higher offer isn't always the strongest offer. I just sold my condo about 7 months ago and I got offers above asking price, however running the cross reference determined said buyers debt to income ratio was not good and it was likely that they would have trouble finding financing.

 

Where I am, it's a seller market. I actually have 4 offers, all above asking. Every one has been pre-approved and vetted by my broker. One guy is even offering to give the 10% contract deposit directly to me and not put it in escrow. If he can't secure a mortgage then I get to keep the deposit. He owns another house up the street. It's tempting but my wife isn't comfortable with that.

The reason I'm deciding between buyer A & B is because they were found by my broker so I save .5% on the fee since its not a shared commission. @North Star - I kinda agree so I think we're going to go with Buyer B. He's also been the most involved, having come to see our house twice and asked all the right questions.

Good problem to have. Thanks TW peeps for the advice.

 

Buyer A isn't the buyer. The BIL taking out the loan is (think like the bank). I'm not sure what 'vetted' means in your brokers eyes, and while proof of funds is nice, is that for the down money, or is that a pre approved loan amount for the buyer? If the latter, I'd take it. If not, you have some real risk of them not being successful once the bank digs in.

Suggest telling Buyer B he is in 2nd place, and you are willing to write a backup contract with him. See if he wants to be first place; he has the right to raise his initial offer.

 

We've already been down that road. He couldn't meet the $5k difference but came up 1/2 way at $2500. Contract is being written up now. Broker feels we made the best descision. We're happy.

 

In the end that's what matters.

From what you describe, I'd take the $2500 hit just on the basis that the other party would falter on the loan success.

Last house we sold (down to two now, thank goodness) we had a buyer (also a contractor) who was preapproved by a lender for exactly what our asking price was. That worked out really well for both of us.

When our current tenant leaves the rental, we'll likely sell. I'm thinking of asking the realtor to bring us pre-approved or cash buyers only. It may limit our exposure some, but when we get a hit, it should be a done deal.

 

Ah, nice man! Congrats!

 

What kind of lender is going to let them forego an inspection? That's unheard of around here.

 

Seems like regular laws don't apply to certain groups. Fortunately it turned out to be a lucrative situation for me.

 

I'm in California, we just put my mothers house on the market and I've been down this road of buying and selling a home. It's never been fun. I hope this all works out for you.
Neither of those buyers would look good in my eyes. For me those are both extremely high risk buyers. Out here, even when a buyer is pre-approved, the lending institution typically requires a home inspection during the contingency period before the will approve the transaction.

 

Best of luck to you as well.

 

Both situations are technically the same.

As long as you get your money, what does it matter if you are likely selling to a financially irresponsible person?