Analyzing Real Estate Offers
There is a lot to consider when analyzing offers for real estate in Ocean City, MD and the surrounding areas. While each real estate offer is different there are many common factors to consider, which you will find outlined below. A good real estate agent will walk you through each of these factors, explaining their merits and drawbacks.
Price is typically the most important factor when selling a home. The higher the price the better! You still need to evaluate the additional factors below to ensure none of them will have a negative impact on the price being offered. Your real estate agent should do their due diligence to ensure the price being offered can be substantiated by the Buyer.
Aside from price, contract contingencies will have the most impact on real estate deals. Typical contract contingencies include property inspections, financing and HOA reviews. Contract contingencies will be prevalent in Buyer's markets and limited in Seller's markets. Each contingency should be evaluated in light of current real estate market conditions, property condition and the offer price.
When the offer is presented to you by your real estate agent, it should include a summary of the applicable closing costs. Closing costs are limited on the selling side and typically include real estate commissions, transfer and recordation charges and nominal title company charges. If the Buyer is asking for any type of closing cost credit it should be included in the closing cost summary. Be cautious of closing cost credits as they will have a significant impact on the offer price and other components of the real estate transaction.
You will want to ensure the person making the offer is qualified and able to get the real estate transaction to closing. If the Buyer is financing you will want to ensure they are pre-approved with a reputable lender and that the lender is aware of the specific property type they are buying. If the Buyer is paying cash you will want to ensure they can provide “proof of funds” for an amount equal to the purchase price plus applicable closing costs.
What have the Buyer’s proposed as a timeline for closing? Most Ocean City real estate deals move along a thirty to forty-five day closing track. You will want to ensure the proposed settlement date allows sufficient time for you to complete everything you need to prior to closing. Things such as moving items out of the property, filing tax exemptions if you are a non-resident, rental obligations (if applicable) and signing off on closing documents should all be considered.
How much of a "good faith" deposit is the Buyer making with the offer. The deposit can be a good indictor of the Buyer's overall motivation and seriousness.
Are the lender and title company that the Buyer is utilizing local? Each real estate market is different and has its own unique nuances and customs. Utilizing local vendors will go a long way is delivering a smooth real estate transaction for all involved.
As you can see, there is a lot to consider when evaluating real estate offers. Once you receive an offer on your property the real estate agent you are working with should provide a summary of these keys factors. Additionally, the agent should provide you with a "net sheet" that details the offer price, applicable closing costs and your estimated net proceeds. This process will put you in a position to make informed decisions.
If you have any other questions or would like to discuss real estate offers in greater detail, feel free to contact me directly anytime at 443-614-9179 or via email below.