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Eeny, Meeny, Miny, Moe: Factors to Consider When Choosing the Best Offer

Home buyer receiving their home key from their San Diego CA real estate agent

When choosing the best offer on a house, there are several factors to take into consideration, such as the price, timeline, and terms of the sale. Here are some of them.

Earnest Money

In real estate transactions, an earnest money deposit is a payment that a prospective buyer makes along with an offer, or when signing the purchase agreement. Also called a good faith deposit, it shows the buyer’s intent to follow through with the sale and typically amounts to 1% to 3% of the sale price. If the seller accepts, the deposit goes toward the down payment and closing costs.

How much earnest money is the buyer willing to fork over? In most cases, a larger deposit shows that the buyer is serious about purchasing your home. It also shows that they are in a good financial position and therefore qualified to make a home purchase.


When drawing up a contract, a prospective buyer may include contingencies or terms that can be disadvantageous to you as a seller. Some of the most common types of contingencies include:

  • Appraisal contingency – This helps the buyer and lender make sure that the home appraises for the agreed price. This can cause delays if the lender doesn’t think the home’s value doesn’t correspond with the loan amount.

  • Financial contingency – This makes the sale contingent on the buyer’s ability to secure financing for the home purchase. The deal can fall through if the buyer is unable to qualify for a mortgage and the lender refuses to finance the home purchase for any reason.

  • Due diligence contingency – Prospective buyers will ask that a home inspection be conducted within a specified time period. If the inspection uncovers major defects, the buyer can request repairs before finalizing the sale or back out of the deal altogether.

  • Contingency clause– Also known as a home sale contingency, this makes the home sale contingent on the buyer’s ability to sell their current home. This can create delays since the buyer must close another sale of their existing home before they can finalize their transaction with you.

Financing Option: Mortgage or Cash?

When evaluating offers, take note of how the buyer intends to finance their purchase. Are they taking out a mortgage or are they paying cash for your home? If the buyer is taking out a loan, make sure that they have a strong pre-qualification letter. If they’re making a cash offer, make sure they have proof of sufficient funds.

If you need to sell your home fast, a cash offer will hasten the process since a mortgage requires more time for approval. However, you will need to take extra measures to safeguard against fraud. Before accepting a cash offer, it’s crucial to secure a proof of funds letter from the buyer’s bank. This will help you determine whether the buyer truly has sufficient cash reserves or is using a line of credit to purchase your home.

It’s also worth noting that a buyer may use a cash offer as a justification to offer less for your home as it does away with the usual contingencies and allows for a quick sale. If they offer less than the asking price, you will have to decide whether the amount is worth the benefits of a faster and less complicated transaction.

Closing Timeline

What is the ideal closing timeline for you and your household? Do you need to close the sale as soon as possible or will you need more time to find a new home and plan for a move? Choose an offer that can accommodate your ideal timeline. Closing typically takes 30 to 90 days depending on the terms of the sale.

Keep in mind that after accepting an offer, you will need sufficient time to conduct a title search and demonstrate that you’re the lawful owner of the home. You will also need to make time for home inspection and lender appraisal. Any delays in these processes can impact the closing timeline.

Sell Your Home in San Diego

Let Jacobo Realty Group help you evaluate offers and choose the one that best suits your needs. Call our agents at 760.632.8900 or message us here to get started.

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