Why the Highest Offer Isn't Always the Best Offer When Selling in Peoria

When offers come in on your home, the instinct is to look straight at the price and pick the biggest number. That makes sense. You've built equity and taken care of your home. But the highest offer isn't always the best offer. Sometimes the top number costs you more time, stress and even money than a slightly lower offer with stronger terms.

I'm Shannan Werckle, a Broker-REALTOR® with eXp Realty and the name behind Greater Peoria Living. When my sellers receive offers, I lay every one out side by side, tell them which I'd choose and why, and let them decide. An offer is a contract with a lot of moving parts. The price gets the attention, but the terms decide whether the sale closes cleanly.

Financing. Cash removes the lender and usually the appraisal, and can close quickly. With a loan, look at how solid the approval is. A pre-qualification is a quick estimate. A pre-approval means the lender has actually reviewed the buyer's income, assets and credit. Different loan types also come with their own appraisal and closing requirements, which affect your timeline.

Contingencies. These are the conditions that let a buyer back out, such as inspection, financing, appraisal, or needing to sell their own home first. None are automatically bad. But an offer with several open-ended contingencies is a very different offer from one with a strong approval and a standard inspection period, even at the same price.

Earnest money. On Peoria-area contracts it's usually about 1% of the price, though it can be any amount the parties agree to. A deposit well above or below that tells you something about how committed the buyer is.

Timing. Does the closing date fit your plans? If you need time to line up your next home, a rushed close creates stress. If you've already moved and you're carrying an empty house, a faster close may be worth a little less.

This one comes from the other side of the table, when I was representing buyers. My clients didn't make the highest offer. They made a competitive, financed offer, but they made it easy for the seller to say yes: a closing date that fit the seller's plans, reasonable inspection requests and a clean structure. It beat a higher offer that asked more of the seller.

That's the point of this whole post, from either side. Sellers weigh more than price, and a strong offer is about certainty and convenience as much as dollars.

The other risk with a top-dollar offer is the appraisal. If the home appraises below the contract price, the lender will only lend on the appraised value, so the gap has to be settled.

I had a sale that became the highest-priced home sold in its neighborhood in a long time, well above anything that had sold there recently. With no truly comparable sales, the appraisal came in low. Both sides had to negotiate the final price and how much of the gap the sellers would cover. We reached an agreement and the sale went forward, but it took real negotiation on both sides.

The lesson: when an offer is well above what nearby homes have sold for, plan for the appraisal before you accept it. That might mean weighing the buyer's ability to cover a gap as heavily as the price itself.

• Buying and selling at the same time? Certainty matters most, because a sale that falls through can put your next purchase at risk. See buying and selling at the same time.
• Flexible on timing? You can consider an offer that depends on the buyer selling their home first. On our contracts, that buyer must list within 3 days of your accepted offer, and I estimate a closing at least about 75 days out.
• Settling an estate? Simplicity often wins. A clean offer with fewer unknowns can be worth more than a higher price. See estate and inherited home sales.

You can also counter any offer on price, timing, contingencies or credits. Sometimes the highest price really is the best offer. Often it isn't, and seeing everything side by side is how you tell the difference.

If you're thinking about selling in North Peoria, Washington, Dunlap or anywhere nearby and want to know what a strong offer looks like, I'd be glad to walk you through it. My How I Sell page shows how I handle offers. Get in touch here.