Multiple offers - Which one is best?!

Multiple offers - Which one is best?!

Property Manager · St. John, IN · Member since 2017 · 67 posts · 30 votes

I have a property I rehabbed in NW Indiana. We've been fixing and flipping houses in the area for a few years, but this property is my personal residence. I did the work slowly as I had time over the last few years. A lot of time and effort went into making this house special. Friday we listed the house and we have gotten intense intrest. We have had 6 showings and 2 more showing request. As of Today (Saturday) we have already gotten three offers. Really gratifying to see people appreciate our work! I'll briefly describe the offers and if more info is needed ask in the comments

The first offer was highest. FHA loan 3% down. Buyer is asking for appraisal and inspection. Buyer is asking for home warranty and a couple other small things. Offer was 2k above asking. We would net about 71k at closing.

2nd offer was similar but net at closing would be about 500 less once everything is calculated.

The third offer is the interesting one. Cash buy offering a little less but splitting closing costs. No appraisal but will have inspections. Net at closing would be about 2k under best offer.

Our agent was in contact with all the other agents prior to offers and everyone is aware that there would most likely be multiple offers coming and have given what we believe to be their best offer. WIthout getting into negotiating a better deal can I get some opinions on what we already have on the table? Cash buyer vs a little extra money and a finanaced buyer.

One other note we believe we are hitting the ceiling for what our house will appraise for, so that seems to be another adavantage to the cash buyer. Let me know your opinions please. People have been moving into our area from Chicago. We are just across the state line and taxes are much lower. Our house has easy access to the highway so we new it would be hot but this is insane. I don't have official pics to post yet but here are some screen shots of the listing.

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
9y

I'd take the cash offer. 

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  • Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
    9y

    I'd agree with others.  The cash offer with the understanding there will be no credits or reductions from inspections - assuming you don't have anything major lurking, would be the way to go.

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y

    @Jon Graham why not counter back on the third offer and ask for $1-2K more? Pretty much every offer I ever made assumed I would come up a little bit, so my guess is they will accept your counter.

  • Property Manager · St. John, IN · Member since 2017 · 67 posts · 30 votes
    9y
    Originally posted by @Joe Splitrock:

    @Jon Graham why not counter back on the third offer and ask for $1-2K more? Pretty much every offer I ever made assumed I would come up a little bit, so my guess is they will accept your counter.

    The third buyer was made aware of mutiple offers prior to submitting and that we were close to accepting the first offer and they needed to come in with their best offer. I know some people may not agree with my approach and by not pushing everyone to re-submit, but in essence we did this out of the gate by letting everyone know of the interest and previously submitted offers. We were already ahead of the anticipated sale price so the risk/reward wasn't there for me to chance losing the cash buyer.

  • Property Manager · Metro Detroit, MI · Member since 2008 · 305 posts · 362 votes
    9y

    if you don't think it will appraise, take the cash and run!

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Jon Graham:
    Originally posted by @Joe Splitrock:

    @Jon Graham why not counter back on the third offer and ask for $1-2K more? Pretty much every offer I ever made assumed I would come up a little bit, so my guess is they will accept your counter.

    The third buyer was made aware of mutiple offers prior to submitting and that we were close to accepting the first offer and they needed to come in with their best offer. I know some people may not agree with my approach and by not pushing everyone to re-submit, but in essence we did this out of the gate by letting everyone know of the interest and previously submitted offers. We were already ahead of the anticipated sale price so the risk/reward wasn't there for me to chance losing the cash buyer.

    I have had the same thing happen multiple times where the seller says to submit your best offer due to multiple offers. People still come back and negotiate. It is a common practice. Nobody is going to walk away over a $1000 and worst case you just have to accept their original offer. I don't see the buyer walking away just because you tried to negotiate a little. If they are that sensitive, good luck with your inspections.

  • Real Estate Agent · Tucson, AZ · Member since 2016 · 168 posts · 106 votes
    9y

    The cash offer is only a couple thousand less than the FHA. But you will be sure to get it (which you might not be with appraisal). Plus, even if it appraises, the deal could fall through for some other reason (buyer loses job, buyer gets cold feet, etc). I would take the cash & run. Plus, the quick closing means you won't be carrying the house as long. But it sounds like you already know all this- reassurance is always a good thing!

  • Property Manager · St. John, IN · Member since 2017 · 67 posts · 30 votes
    9y
    Originally posted by @Joe Splitrock:
    Originally posted by @Jon Graham:
    Originally posted by @Joe Splitrock:

    @Jon Graham why not counter back on the third offer and ask for $1-2K more? Pretty much every offer I ever made assumed I would come up a little bit, so my guess is they will accept your counter.

    The third buyer was made aware of mutiple offers prior to submitting and that we were close to accepting the first offer and they needed to come in with their best offer. I know some people may not agree with my approach and by not pushing everyone to re-submit, but in essence we did this out of the gate by letting everyone know of the interest and previously submitted offers. We were already ahead of the anticipated sale price so the risk/reward wasn't there for me to chance losing the cash buyer.

    I have had the same thing happen multiple times where the seller says to submit your best offer due to multiple offers. People still come back and negotiate. It is a common practice. Nobody is going to walk away over a $1000 and worst case you just have to accept their original offer. I don't see the buyer walking away just because you tried to negotiate a little. If they are that sensitive, good luck with your inspections.

     Glad all those situations worked out for you! We made the best decision based on the circumstances involved. You are incorrect about the worst case scenario though. Worst case scenario is the cash buyer settles on a different property because he had more than one property in mind and me not accepting his 'best' offer was enough to turn him towards another home. Cheers.

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