There is nothing more satisfying when you are selling a house than to have multiple offers from which to choose. Fixing a closing date does tend to concentrate the buyers’ minds. It also means the competition usually leads to a higher sale price. However, at the closing date, should you always accept the highest offer?
Your solicitors will discuss all the offers with you and explain the conditions they contain. They will also outline any clauses which cause them concern. They will seek your instructions before they issue an acceptance to the successful party. However, there are some offers you should jump at and others you should consider avoiding.
Offers from cash buyers
Receiving an offer from a cash buyer is very positive. It means they are not relying on a mortgage before being able to complete the purchase. However, cash buyers come into two main categories. The first are cash buyers who have the funds available to buy your house without depending on a mortgage. The second are cash buyers who do not have to depend on a mortgage, but they need to sell their own house. Those buyers might make their own sale a condition of the offer. Even if they do not make it a condition of the offer, your solicitor will enquire about the stage their sale has reached.
Clearly, an unconditional offer from a cash buyer who does not have a house to sell is a much safer option. This holds true even if the offer is not the highest. When you do receive multiple offers on a closing date there is always a choice. If there is a cash buyer, it might be better to accept this offer rather than accept the highest offer.
Buyers who need a mortgage
The second category of buyers is those who need a mortgage to help them buy your house. Lenders can give buyers an indication in principle that they will provide a mortgage. However, it is not until they issue an offer of loan that the buyer will be able to confirm the purchase can go ahead. Frequently, buyers depending on a mortgage will insert a clause in the offer that the purchase is subject to them receiving a satisfactory mortgage offer. You have no control over this aspect of your sale and you are dependent on the buyer’s lender formally offering the mortgage.
Within this category are also those buyers who have properties to sell as well as needing mortgages. Again, your solicitors will enquire about the stage the buyer’s sale has reached. They will then let you have an indication of the risk involved in accepting an offer from such a buyer. It is not unusual for buyers to be selling their own property and requiring a mortgage to buy a new house. You might also be in the same situation.
Timing – does the date of entry suit?
When most people are selling their house, they are usually looking to buy a new house. Depending on where they are in the selling process, they may be tied into a fixed date of entry.
When you receive offers, you may find that not all of them can give you the entry date you need. In such circumstances, you might decide not to accept the highest offer. You might decide to accept one that can match your date of entry.
Suspensive conditions
The final category when deciding whether to accept the highest offer is whether they contain any suspensive conditions. Offers like these might impose conditions on you to do something before the date of entry. Alternatively, they may give the buyer options to withdraw.
Conditions of this nature can be wide and varied. The offer might be subject to the buyer receiving a satisfactory mortgage or survey. On the other hand, it may make no mention of mortgage funding but be subject to you obtaining local authority permissions for alterations. There may be suspensive conditions relating to access, septic tanks, boundaries or common property. In fact, the list of suspensive conditions can be endless!
The important thing is to compare the conditions in each offer to work out which offer is best overall for you. For all these reasons, it might not always be appropriate or sensible to accept the highest offer!
Where can you get advice on whether to accept the highest offer?
Carr Berman Crichton deals with hundreds of house sales and purchases every year in Rutherglen, Glasgow and across Scotland. We have years of experience in dealing with sellers and buyers of residential properties. We will advise you of your options when it comes to buying a house or selling a house. In addition, we will point out the pitfalls in all the offers you receive. And whilst the highest offer might be the most attractive, there may be circumstances where we recommend you do not accept the highest offer.
If you are thinking of buying or selling your house and have any questions about the process, please call us on 0141 648 9851 or click here to contact us.
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