The home-selling process is filled with highs, lows, and uncertainty. If your property is located in an area with high demand, you’re probably expecting to receive tons of offers and for things to be easy. This is both a blessing and a curse! Why is that? Sadly, not all home buyers are very serious. There are telltale signs that a buyer is legitimate.
Here are eight surefire ways to tell how serious a home buyer is and how to avoid wasting your time with ones that are not.
How to Tell if a Home Buyer is Serious
1. Preapproved for a Mortgage
Home buyers who come to the table with a mortgage preapproval are a step ahead. A pre-approval means that a lender has already assessed their creditworthiness, income, and debt-to-income ratio. It’s a green light from a financial institution saying, “Yes, they can afford a house in this price range.”
If a buyer makes you an offer without a preapproval letter, that is a sign that they’re not very serious. There’s a chance the buyer can’t even get a mortgage to buy your home. That could be a major issue if you find that out later in the process after accepting their offer.
As a seller, working with buyers that are preapproved gives peace of mind that the deal is probably won’t fall through due to financing issues. It’s like having a buyer show up with a verified badge of credibility. Serious home buyers will be preapproved and show that to you from the get-go.
2. Working with a Realtor
When a buyer is working with a realtor, it’s a good sign that they’re serious about purchasing your home. Many first-time home buyers who just started looking for a property don’t have a real estate agent by their side. They might not even know one or didn’t know they needed one. When you see this, be cautious. It could mean that the buyer is not serious.
Take this sign with a grain of salt. Not all home buyers that aren’t represented by realtors are tire kickers. Companies that purchase houses for cash as investments don’t always go through realtors, unlike a typical first-time home buyer who often relies on agent guidance. These investors, like SD House Guys, typically feel comfortable submitting offers without the help of an agent. However, there are also investors out there who aren’t very legitimate. Review the rest of this list to know if a home buyer is serious before accepting their offer.
3. Offer Without Contingencies
An offer without any contingencies is a seller’s dream. This is a clear way to tell that a buyer is serious. Contingencies are safety nets – similar to home inspections or financing approvals – that buyers use to back out if things don’t go as planned. When a buyer waives these, it demonstrates a level of commitment that should give you confidence in them. It implies that the buyer is not only serious but also prepared to close without backing out.
4. Proof of Funds
A buyer who can provide proof of funds is as good as gold in the real estate market. Additional financial documentation that makes buyers more legitimate are bank statements, investment account statements, and letters from their financial institutions. The more the merrier when trying to tell if a buyer is serious about your property.
Buyers can have a preapproval but not have the funds to close. Yikes! That means they might not have enough money for the downpayment and closing costs. In real estate, talk is cheap! Deals fall through due to financial constraints constantly because buyers don’t have enough funds. Get reassurance that the home buyer is serious and can successfully close by verifying their proof of funds.
5. Selling Current Home
When you receive an offer from someone in the process of selling their current home, it’s a great sign that the buyer is serious. They are committed to moving into a new place after the sale of their current one. These homebuyers have skin in the game!
Many of these buyers are on a strict timeline. This move forces their hand, making them purchase a home around the time their current one sells. They aren’t waiting around, eating a breakfast burrito, and not paying attention to the home sale. The sale of their current home is likely tied directly to the purchase of a new one. This is a clear way to know that a buyer is serious about buying your house.
6. Tour the House Within 24 Hours
If a buyer is eager to tour the house within 24 hours of its listing, it’s a massive indicator of serious interest. This demonstrates that they are being proactive and are likely very serious. Are you getting tons of viewing requests for your listing within the first day? That’s a strong sign your house will sell quickly due to the high demand.
Serious home buyers know they need to act fast. In a competitive real estate market, timing is everything. A buyer who is willing to adjust their schedule to see your property as soon as possible is often one who is ready to make quick decisions. This urgency is a telltale characteristic of a serious buyer.
7. Large Nonrefundable Deposit
You know that a home buyer is serious when they include a hefty nonrefundable deposit with their offer. This is more common among companies that buy houses as investments versus traditional buyers. However, if the real estate landscape is competitive, traditional buyers will also flex this muscle. Large deposits show how serious a buyer is about purchasing a home, especially when they are nonrefundable.
8. Ask Questions About the Property
Do lots of questions from a buyer show that they are serious? Not necessary, but it’s a good sign that they are interested or at least curious.
- They can talk the talk, but can they walk the walk?
Engaged buyers are ones that you want to sell to. Although questions are just surface level details, it’s important to know they’re very interested in the property itself. When they ask about things like the age of the roof, type of heating system, or history of renovations, they are trying to understand the long-term viability of the home. These deeper questions make it easier to tell if a home buyer is serious or not.
Signs of a Serious Home Buyer
Leverage this guide when trying to tell if a buyer is serious. There are signs all around you that indicate how credible they are. Alongside the data, trust your gut and intuition. Buyers can sometimes appear serious when in fact they are not. Don’t hesitate to request additional information and documentation from buyers to confirm that they are serious about purchasing your home.