People work tirelessly to generate interest in a home they are trying to sell. Once they get an offer, however, they often are not sure how to evaluate it. Buying and selling a home can be tricky, and navigating through the various legal terms is confusing. Don’t be fooled by evaluating the offer you received on your investment. You must get the best profit possible.
Evaluating the Offer for Your Home
We already know, you have read every book under the sun. You have read more internet articles than you can imagine. You have cleaned up your home, made repairs and put out your marketing. At this point, you feel like you are an expert in the process. Suddenly, you get an offer on the property. Now what?
The first thing to do is relax and breathe. Do not make the mistake of rushing to evaluate it. An offer is just that – an offer. It has contingencies and all kinds of little quarks in it. You need to realize you are in a business transaction and it’s important to consider all aspects of the offer on your investment. Once you have caught your breath, it is time to consider the offer.
The first issue, it seems like, is always the offered purchase price. The price will never be what you are asking for in the listing. It will be below the number, perhaps shockingly lower. At this point, you may feel the urge to pick up the phone and give the buyer a piece of your mind. Don’t! This is a business transaction. The buyer is merely throwing out a bit of bait to see if you are going to bite. If you do, they get a great deal. If you do not, they will evaluate any counter-offer you make. If you do not counter, they can always submit a higher offer. Remember, this is a business transaction, not an affront to your pride!
If you were investing in a property, you know what it’s like to be on the buyer side of things. Get into the selling mindset and what that will mean for building your wealth.
A second issue concerns items in the home the buyer may want to be included in the sell. Only you can decide how valuable the things inside how are and whether it is worth losing the sale. Try to be objective and coherent when making the decision.
After this, you need to evaluate any additional costs associated with the offer. The buyer may want allowances for painting and so on. This will require you to make some basic financial calculations. Take the offered price and subtract all costs for the transactions. Once you have the net revenue figured out, compare it to the bottom line number you decided on when you first decided to sell. This will tell you if it is an offer you should accept. Take into consideration the number of renovations you have done to the home as well. If it’s been a significant amount, be sure to think about this when discussing the offer.
Investors often get so focused on the selling and renovating process, that sometimes they get caught a little off guard when an offer comes in. Remember the value of the home and what you have done to improve. Don’t take an extremely low offer, but also be reasonable with the sale. Stick to your guns on your bottom line and you should be fine.