When considering which of two or more competing offers to accept for your property, there is no doubt price will play a huge role.
After all, if Offer #1 is $10,000 higher than Offer #2, that’s an enticing difference that puts thousands of extra dollars in your pocket. However, price isn’t the only thing you should think about when comparing multiple offers. There are other factors you need to consider too.
For example, you’ll need to think about the impact of any conditions that are in the offer. If Offer #1 is conditional on the buyer selling their current property, then what happens if they don’t? You could end up with an offer that dies and be forced to list your property all over again.
In that circumstance, accepting the lower offer may be your best move.
There’s also financing to consider. Most sellers will attach a certificate from their mortgage lender to show that they can afford the property and will likely secure financing with little difficulty. If you get an offer where the ability of the seller to get financing is in doubt, that’s a red flag.
The closing date is another important factor. Offer #2 might propose a closing date that’s perfect for you, while Offer #1 is four weeks later. If you’ve already purchased another property, you might require a month of bridge financing if you accept Offer #1. There’s nothing wrong with that per se, but the costs and additional hassle are factors you should consider.
As you can see, assessing competing offers isn’t as easy as it looks.
Written by Rodney Harvey, Broker of Record at Konfidis, Brokerage providing advisory-focused commercial, industrial, investment, and real estate brokerage services across Oshawa, Durham Region, and Ontario.
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