In today’s competitive real estate market, multiple offers are common on many investment properties, and the selling process can feel like a wild ride. If you’re in a competing situation and sending out a best and final call for offers, here are four essential questions to help you qualify buyers and get to a successful closing.
1. Have They Seen the Property in Person?
If a buyer hasn’t personally toured the property, it can create challenges down the road when unexpected conditions come up. To reduce risk, get the buyer through as much of the property as possible, or provide due diligence materials that thoroughly reveal everything you know about its condition. An extensive private picture deck is an excellent way to cut down on time spent walking units while still sharing as much as possible with potential buyers.
2. Why Do They Want to Buy This Deal?
This is key. If a buyer already owns three other properties on the block, you know they’ll be a more committed buyer who understands the market. On the other hand, someone just looking to get into a particular market may be more motivated on price. Understanding a buyer’s motivation can make the entire decision process easier.
3. What Other Properties Do They Own?
A buyer’s experience level can make them much easier to work with, especially if they’ve owned a similar property, completed needed renovations, or have insight into a key piece of your deal. For example, if your property has excess land that could support additional units, a buyer with past construction experience is more likely to move quickly through, or waive, any related contingency.
4. How Are They Paying for the Property?
Asking careful questions here gives you a much broader picture. Plenty of investors in a competitive market can pay in cash or bring a substantial down payment, but that money is often coming from loans on other properties they own. That can work out fine, but if the loan process on that equity property isn’t finished yet, it could affect your closing. If they’re using traditional financing, learning about their lender relationship can tell you what to expect while under contract. Knowing the lender will provide a smooth process makes your decision as a seller a lot easier.
Selling in a competitive market can have a lot of fun. It moves fast and can have highs and lows just like an amusement park ride, but being prepared ahead of time can ease the anxiety and help make sure you arrive safely at your destination. If you’re weighing how to approach your next sale, it’s worth reviewing your options for maximizing the sale before you get multiple offers. If you’d like a consultation on your portfolio to know if now is the right time to move up or transition your holdings, call us for a free consultation on the process and expected market returns.
