The Art of Offer Evaluation
Receiving an offer is exciting, but the highest price isn't always the best offer. Smart sellers evaluate the complete package - price, terms, timeline, and buyer qualifications. Your agent's negotiation skills can often increase your net proceeds by thousands of dollars.
What Matters Most
Net Proceeds
Your actual take-home after all costs and concessions
Buyer Qualification
Strength of financing and ability to close
Closing Timeline
Alignment with your moving and buying needs
Contingencies
Conditions that could derail the sale
Evaluating Offer Components
Look beyond the purchase price to understand the true value of each offer.
💰 Financial Terms
Purchase Price
The headline number, but not the only consideration
Down Payment
Higher down payments indicate stronger buyers
Earnest Money
Shows buyer's commitment to the transaction
Closing Costs
Seller concessions reduce your net proceeds
📋 Contingencies
Financing Contingency
Buyer must secure approved loan
Inspection Contingency
Buyer can request repairs or cancel
Appraisal Contingency
Home must appraise at purchase price
Sale of Buyer's Home
Buyer must sell current home first
Buyer Qualification Assessment
A qualified buyer is more important than a high offer that falls through.
🟢 Strong Buyer
Indicators:
- Pre-approval letter from reputable lender
- 20%+ down payment
- Stable employment history
- Debt-to-income ratio under 36%
- Cash reserves for closing
🟡 Moderate Buyer
Indicators:
- Pre-approval with conditions
- 5-19% down payment
- Recent job change or gaps
- DTI ratio 36-43%
- Limited cash reserves
🔴 Weak Buyer
Red Flags:
- Pre-qualification only (not pre-approval)
- Minimal down payment (3-5%)
- Credit score concerns
- DTI ratio over 43%
- First-time homebuyer with no reserves
Multiple Offer Situations
When you receive multiple offers, strategic handling can maximize your outcome.
Step 1: Initial Review
- Don't rush - take time to analyze each offer thoroughly
- Calculate net proceeds for each offer after all costs
- Assess buyer qualification strength
- Consider timeline compatibility with your needs
Step 2: Counter Strategy
- Best and Final: Ask all buyers for highest and best offers
- Escalation Clauses: Allow buyers to automatically outbid others
- Selective Counters: Counter only the most promising offers
- Non-Price Terms: Negotiate closing dates, contingencies, inclusions
Step 3: Final Selection
Negotiation Tactics
Your agent's negotiation skills can significantly impact your final outcome.
Price Negotiations
Anchoring
Start with your asking price as the reference point for all negotiations
Incremental Concessions
Make smaller concessions each round to signal you're reaching your limit
Package Deals
Bundle price with other terms - "We can accept $X if you waive inspection"
Market Justification
Use comparable sales data to justify your price position
Terms Negotiations
Contingency Limits
Shorten timelines and limit scope of inspection repairs
Closing Date Flexibility
Offer rent-back or early possession to accommodate buyer needs
Inclusion Negotiations
Use appliances and fixtures as negotiating chips
Earnest Money Increases
Request higher earnest money for price concessions
Common Negotiation Scenarios
Prepare for these typical situations with proven response strategies.
Low-Ball Offer
Situation: Offer 10-20% below asking price
Inspection Repair Requests
Situation: Buyer requests $5,000+ in repairs
Appraisal Shortfall
Situation: Home appraises $5,000 below contract price