Important highlights
- Before accepting an offer, be aware that not all offers are equal and ask the right questions.
- Issues like weak deposits, excessive contingencies, or unreliable financing can hinder your sale process.
- Consider consulting a professional Redfin real estate agent to assess buyer strength and avoid risky deals.
Selling your home should be a joyful experience, but not all offers should be taken at face value. According to the National Association of Realtors, 11% of home sales face delays, often due to financing or appraisal issues. Being aware of what to look for in an offer can save you time, money, and frustration.
Here are seven warning signs in a house offer that every seller should be able to identify.
1. Inadequate earnest money deposit
The earnest money deposit is a sign of a committed buyer. A low or missing deposit may indicate a lack of commitment. A serious buyer typically puts down 1% to 3% of the purchase price.
2. Virtual buyers who haven’t visited the property
Some buyers make offers without physically touring the property. While this may seem harmless, it can lead to complications if they change their mind after an inspection. Consult your agent on how to protect yourself from virtual buyers.
3. Home-sale contingency
A home-sale contingency means the buyer must sell their own property before buying yours. This can cause delays and uncertainty. If considering such an offer, inquire about adding a kick-out clause to keep your home available for other potential buyers.
4. Unusually long inspection periods
Standard inspections usually take about a week. A buyer requesting extra time may be testing the waters or stalling for various reasons. Longer inspection periods could mean more chances for the buyer to back out.
5. Weak or questionable financing
Financing issues are a common reason for deal failures. A strong offer should include a preapproval letter from a reputable lender. Be cautious if the buyer’s financing seems uncertain, comes from an unfamiliar lender, or relies on the sale of another property.
6. Offers above the asking price without appraisal gap coverage
An offer significantly above your listed price may seem attractive. However, if the home doesn’t appraise at that value, the deal could fall through — unless the buyer is willing to cover the gap with cash.
7. Sloppy or incomplete paperwork
Attention to detail is crucial. An offer with missing signatures, vague terms, or inconsistencies could indicate inexperience or disorganization. Errors in contracts may lead to delays or cancellation of the deal.
Bonus: Seller red flags to be cautious of
It’s not just about the buyer. Sellers may lose strong offers if their property exhibits red flags like mold, pests, or strong odors. Overpricing can also deter potential buyers, resulting in longer market times and decreased interest.
Seller checklist: Identifying red flags in offers
Before accepting an offer, use this checklist:
- Is the earnest money deposit between 1% to 3%?
- Has the buyer seen the property in person?
- Is there a home-sale contingency, and is there a kick-out clause?
- Is the inspection period reasonable, around seven days?
- Does the buyer have a strong preapproval or verified cash funds?
- Is there appraisal gap coverage if the offer exceeds the listing price?
- Is all paperwork complete, signed, and consistent?
FAQs about red flags in a house offer
What’s the most significant red flag in a house offer?
Uncertain financing. Without a solid preapproval or proof of funds, the deal is at a higher risk of collapsing.
Should offers with contingencies always be rejected?
Not necessarily. Standard contingencies like inspection and appraisal are common. The key is to watch out for unusual or excessive contingencies that give the buyer too much control.
How can a Redfin real estate agent assist in identifying red flags?
Redfin agents are trained to evaluate offers, confirm buyer credibility, and assist in negotiations to help you make informed decisions.
Final thoughts: seller’s perspective on offer red flags
The highest offer isn’t always the best one. By recognizing these red flags in a house offer, you can prevent delays, reduce risks, and select the buyer most likely to close the deal. A Redfin agent can guide you through the process and ensure you don’t overlook any crucial details.
Discover more resources for sellers: How to Sell a House With a Realtor, What Happens After a Home Appraisal, and Seller’s Guide.