Is That Offer on Your House a Winner? 7 Steps to Decide

Written by David Dodge  

Selling your home can be an emotional and financial rollercoaster. When an offer lands on your table, it’s tempting to jump at the first number that looks good—or reject one that feels too low. But evaluating an offer is more than just comparing price tags. It’s about understanding the full picture: the buyer’s terms, market conditions, and your own goals. This guide breaks down the key factors to consider when assessing an offer on your house, ensuring you make an informed decision.

Step 1: Look Beyond the Price

The offer price is the headline, but it’s not the whole story. A high offer with shaky financing or unreasonable contingencies can be riskier than a slightly lower offer from a well-qualified buyer. Consider these elements:

• Financing Type: Is the buyer paying cash or relying on a mortgage? Cash offers are typically faster and less likely to fall through due to lender issues.
• Contingencies: Look for contingencies like home inspections, appraisal requirements, or the sale of the buyer’s current home. Fewer contingencies often mean a smoother process.
• Closing Timeline: Does the buyer’s proposed closing date align with your needs? A quick close might be worth more than a higher offer with a long escrow.

Pro Tip: Ask for a pre-approval letter if the buyer is financing. This shows their lender has vetted their ability to secure a loan.

Step 2: Assess the Buyer’s Financial Strength

A great offer is only as good as the buyer’s ability to follow through. Request proof of funds for cash buyers or a strong pre-approval for those using a mortgage. A larger down payment (20% or more) signals financial stability and reduces the risk of appraisal issues.

Step 3: Compare to Market Trends

To know if an offer is fair, you need context. Look at recent sales of comparable homes (comps) in your area. Your real estate agent can provide a Comparative Market Analysis (CMA), or you can check public records or platforms like Zillow or Redfin for recent sales data. Pay attention to:

• Sale Prices: Are homes selling at, above, or below asking price?
• Days on Market: Are homes selling quickly, or sitting for months?
• Local Demand: Is your area a buyer’s or seller’s market?

Below is a sample of recent home sales in a hypothetical neighborhood to illustrate how comps can guide your decision:

Source: Hypothetical data based on typical market analysis from public records and real estate platforms like Zillow or Redfin.

If your home is similar to these (say, a 3-bedroom, 2-bath, 1,850 sq ft house), an offer of $460,000 is in the ballpark, but one at $400,000 might be too low unless the buyer offers other favorable terms.

Step 4: Weigh Contingencies Carefully

Contingencies protect buyers but can complicate your sale. Common ones include:

• Inspection Contingency: Allows the buyer to negotiate or walk away if issues are found. Be prepared for repair requests.
• Appraisal Contingency: If the home appraises below the offer price, the buyer may need to cover the difference or renegotiate.
• Sale Contingency: The buyer must sell their current home first, which can delay or derail your sale.

If a buyer’s offer includes multiple contingencies, consider countering to remove or limit them, especially in a seller’s market.

Step 5: Factor in Closing Costs and Concessions

Some buyers ask sellers to cover closing costs, repairs, or other concessions (e.g., paying for a home warranty). These can eat into your net proceeds. For example, if you accept a $450,000 offer but agree to $10,000 in concessions, your effective sale price is $440,000. Run the numbers to understand your true takeaway.

Step 6: Consider Your Timeline and Goals

Your personal situation matters. Are you in a rush to sell due to a job relocation? Or can you wait for the best possible offer? If you need to move quickly, a slightly lower cash offer with a 14-day close might beat a higher offer with a 60-day escrow. Conversely, if you’re in no hurry, you might hold out for better terms.

Step 7: Negotiate Strategically

Rarely is the first offer the final one. If the price or terms aren’t ideal, counter with what works for you. For example:

• If the offer is low, counter with a price closer to your target, but signal flexibility.
• If contingencies are a concern, ask to remove or modify them.
• If the closing timeline doesn’t work, propose one that does.

Work with your agent to craft a counteroffer that keeps the buyer engaged while protecting your interests.

Final Thoughts

Evaluating an offer on your house is a balancing act. Price matters, but so do the buyer’s financial strength, contingencies, and alignment with your timeline. By comparing the offer to market data, scrutinizing the terms, and staying clear on your goals, you’ll be equipped to make a smart decision—whether that’s accepting, countering, or waiting for the next offer.

Disclaimer: Always consult a licensed real estate professional for advice tailored to your specific situation.