In a recent blog post, I shared the near-the-finish-line story of using the BNP truck to do a final clean-up on a coming-soon listing.

We had been working on prepping the house since mid-June (the neighbor, my friend Gabe, for much longer than that).The clean-up was followed by a flurry of last-minute prep work including:

Professional deep cleaning by Debbie Martin
Window cleaning by Scrub-a-Dub Denae Sackman
House and roof wash, beauty bark and touch-up painting by Ragnarock
Staging by SavvyNess Interiors
Photos by Greenwood Photographic Arts

(Contact me for referrals to any of the above!)Then, last week Thursday, with everything in place, we hit the market!

We knew it would be a popular listing, and it didn't disappoint.

Yesterday we reviewed 9 offers.

It wouldn't be unusual for someone to think: "Highest price wins!"But YOU know, there's a LOT more to a winning offer aside from just price.

I'm going to cover the terms buried in the offer that ultimately prevailed -- and some of those that didn't, and why.

Price matters, of course!

Obviously, a seller is going to look carefully at the price a buyer has put on paper.

We listed this house at $495,000 and gave the market 5 days to look it over.

As the deadline hit, we had 9 offers ranged from $505K to $580K.All other things being equal, (and if total anonymity of the buyers was maintained), it would USUALLY be fair to say that highest offered purchase price wins.

But all other things are almost never equal in the additional pages of an offer.

Let's go over the others that came into play:

Cash for financed?

You know the phrase: Cash is King!

That's because a cash buyer doesn't need to jump through the hoops of qualifying for a home loan, with all its criteria including:

Income verification and stability
Credit score
Debt load
Tax returns
Job tenure
Etc.

And also that often-very-late-in-a-transaction curve-ball that can rare its head:

Appraisal -- and the risk of it coming in below contract price.

A cash offer carries a lot of weight with a seller who wants a fast, clean, and tidy closing with minimal delays or surprises.

In this case, all 9 offers were financed -- meaning, every buyer required a mortgage in order to buy this house.

So we looked at the most closely related thing:

Down payment amount

There are plenty of loans out there that require only a minimal down payment, i.e. 3% or less.

Heck, a VA (veterans affairs) loan is a super strong loan and can have 0% down.But when a buyer has a massive down payment, like hundreds of thousands of dollars, versus, say, $15,000...

That boosts seller confidence, and although this isn't across the board, it often increases the likelihood that the lender is going to ease up a bit on their scrutiny -- and possibly even waive appraisal.

In our stack of offers, down payments ranged from 3.5% to about 75% of offer amount.

Several of the offers even had an...

ADDITIONAL down payment addendum

This is a form introduced in April, 2021 -- AKA the peak of the market frenzy -- that states:

"If the appraisal comes in low, the buyer will bring more cash to the table to cover the spread between contract price and the low appraisal amount, up to ___________________ (an amount proposed by the buyer, and negotiated between buyer and seller.)

"This has become a VERY powerful addition to a financed offer as appraisers struggle to get their heads around this jumbled and confusing market we're in right now.

We noted the offers with additional down payment addenda, then looked at...

Closing date

Time kills deals.

Generally speaking, the quicker you can get a deal wrapped up, the less chance you have of something going sideways.

When a house is vacant, typically a seller wants as short a closing timeframe as possible.

(That can be a much different story if a house is occupied, and the seller needs extra time before they can get moved out.)

In our case, faster was better.

The closing dates we had in front of us ranged from about 3 weeks, through to "indefinite".The indefinite was a result of the next thing we looked at:

Is the buyer ready, willing, and able to buy right now?

In two of the nine offers we had, the answer was "No."

That is, those two offers were contingent on the buyer first being able to sell a property they currently owned.

So if we agreed to their offer, we would be in a holding pattern while they marketed and tried to get their property listing under contract with a buyer......

then keep that deal together......

and if that deal fell apart before closing, we were back to square one.

In my career, I have not personally seen a "contingent offer" beat out a ready, willing, and able offer in an auction situation.

But let me tell you, we talked it through in detail, because the highest offer by tens of thousands of dollars was contingent.

We considered:

"Should we take a gamble, give the contingent buyer a shot at his maximum price, try to put one of the non-contingent buyers in back-up, and see if it works out?"

It was tempting.

But ultimately, we decided against it because:

the contingent buyer's down payment wasn't that strong,
there was no "additional down payment" addendum,
and we feared a low appraisal at our very-high negotiated price in that scenario.

So we set aside the two contingent offers and turned back to the remaining 7, looking next at...

Inspection contingencies

A home inspection contingency is that extra form that lets the buyer bring in an inspector, put the house under a microscope, and then either ask for a price reduction, a seller-credit for repairs, or worse:

Slip out of the deal with no penalty and no questions asked.

It's the most subjective off-ramp a buyer has, because it lets them out "for any reason, or no reason at all.

"Four of the buyers actually performed pre-inspections, meaning they hired an inspector to spend a couple of hours at the house before they even wrote their offers.

Then those buyers simply waived their right to inspect if their offer was accepted.

This is massively attractive to a seller, because it eliminates the most common reason for a buyer to try renegotiating the price or asking for thousands of dollars of repairs......

and it tightens the likelihood of the deal closing.

Five of our 9 offers waived inspection.

The 4 that had inspection contingencies shortened them from the boilerplate 10 days, to a range of 2 to 5 days.(If you can't / won't waive it, at least shorten it. The less time you keep the seller holding their breath awaiting the outcome, the better.)

And there are plenty of other terms

I've listed the particular terms that influenced the decision on this listing.

There are plenty others that didn't factor as heavily, including:

Earnest money amount
Earnest money refundability, if at all, and when?
Waiver of right to terminate based on Seller's Disclosure review
Waiver of "Paragraph W" (information verification period)
Who even is the lender? (often massively influential)
Who is the buyer's agent, and how communicative / professional / easy are they to work with?
Exact terms aside, how well-written and well-organized is the Purchase and Sale Agreement?

Let me focus on this for a minute.

You may not think this factors in, the general quality of how the offer is assembled, but let me tell you it absolutely comes into play.

A Purchase and Sale Agreement (an "offer") can be 15 to 30 pages and 5 to 10 various forms and addenda, disclosures, legal description, pre-approval letter -- packed full of sensitive, material, extremely expensive, and important information.

If it shows up as a dumpster fire, out of sequence, missing information, poorly worded...How do you think that sets the tone for what that transaction is going to be like?

If two offers have the same price and terms, and one is assembled like a Swiss watch, while the other takes you 20 minutes to even decipher...You get the point.

In the end...

The seller took all of the above into consideration, and ultimately chose to negotiate with the "strongest" offer.

That one was, at the start of the negotiation, only the 3rd highest actual price.

I can't share the exact details of how it turned out until after the sales closes.

Though if you're interested, ping me and I'll be sure to fill you in.

If you are -- or you know -- a buyer or seller here or elsewhere who is navigating a multiple offer "auction" situation, share this blog post and quite possibly help them think of a few aspects they may not have.

The Step-by-Step Process of Evaluating Multiple Offers on a Bellingham House for Sale