What You Actually Need to Look at When Offers Come In

Getting offers on your home feels like the finish line. It isn't. It's the beginning of the most consequential decision in the selling process — and how you evaluate those offers determines whether you walk away with the best possible outcome or leave money and certainty on the table.

I've reviewed offers with sellers in Arcadia, San Marino, Pasadena, Temple City, and throughout the San Gabriel Valley for over twenty years. The mistakes I see sellers make almost always come from the same place: they look at the price and stop there.

The price matters. But it's one number in a contract that has dozens of variables. Here's how to read the full picture.

The Purchase Price Is Just the Starting Point

When two offers come in — one at $1,350,000 and one at $1,280,000 — the higher number looks better. Sometimes it is. But not always.

The question that matters is: which offer is most likely to close at that price, on a timeline that works for you, with the fewest complications along the way?

An offer $70,000 higher that falls out of escrow in week four costs you time, carrying costs, and often a lower eventual sale price when you go back to market. Buyers and their agents notice when a home has been relisted after a failed escrow — and they use it.

Evaluate every offer on what it will actually net you, at close, in your hand.

What Strong Looks Like: The Components That Matter

Earnest Money Deposit

The earnest money deposit (EMD) is the buyer's upfront commitment — the funds they put into escrow immediately to demonstrate they're serious.

In the SGV's mid-to-upper price ranges, a strong EMD is typically 2–3% of the purchase price. On a $1.5 million offer, a $45,000 deposit signals a very different level of commitment than a $15,000 deposit.

If the deal falls apart due to the buyer's fault and outside of a valid contingency, you may be entitled to keep the earnest money. A higher EMD gives you more protection — and more leverage if things go wrong.

Financing Type and Down Payment

All-cash offers eliminate appraisal risk and financing fall-through risk. In the SGV, cash offers are more common than in most SoCal markets — particularly from international buyers in cities like Arcadia and San Marino. When a cash offer arrives, ask for proof of funds before accepting. A letter is not enough; you want to see a bank statement or brokerage account showing accessible liquid assets.

For financed offers, the size of the down payment matters. A buyer putting 30–40% down on a conventional loan is meaningfully lower risk than a buyer putting 5% down with FHA financing — not because FHA buyers aren't qualified, but because larger down payments create more cushion for the appraisal and reduce the chance of loan complications.

Loan Pre-Approval Quality

Not all pre-approval letters are equal. A letter from a large, reputable lender who has actually verified the buyer's documents means something. A letter from an online lender generated in five minutes based on self-reported information means much less.

Your agent should call the buyer's lender directly. A legitimate lender will confirm the buyer's qualifications, their experience closing loans in this price range, and their expected timeline. A lender who is difficult to reach or vague about the buyer's situation is a yellow flag.

Contingency Periods

Standard California purchase contracts include several contingency periods that give the buyer the right to cancel and recover their earnest money under specific conditions. The key ones:

• Inspection contingency: Typically 10–17 days for the buyer to complete investigations and either accept the property or request repairs
• Financing contingency: Typically 21 days for the buyer to secure loan approval
• Appraisal contingency: Protects the buyer if the home doesn't appraise at the purchase price

Shorter contingency periods are more attractive to sellers — they give you certainty sooner. A buyer offering to complete inspections in 7 days is moving with more urgency and confidence than one asking for 17.

Contingency waivers — where a buyer removes the inspection or appraisal contingency entirely — are attractive but carry meaningful risk for the buyer. Understand why a buyer is waiving before reading too much into it. A buyer who waives inspections without having done a pre-offer inspection is taking a significant risk that can sometimes lead to post-closing disputes.

Appraisal Gap Coverage

If a buyer is financing a purchase and the home doesn't appraise at the offer price, the lender will only loan based on the appraised value. The "gap" between the appraised value and the offer price has to be covered somehow.

In competitive situations, buyers sometimes offer to cover a specified appraisal gap — agreeing to bring additional cash to closing if the appraisal comes in below their offer price, up to a stated dollar amount.

An offer of $1,400,000 with $30,000 in appraisal gap coverage is materially stronger than $1,400,000 with no gap provision, especially in a market where you're uncertain whether the home will appraise at the offer level.

Closing Timeline

Does the buyer's proposed closing date work for you? If you're buying your next home simultaneously and need a specific timeline, a buyer whose schedule doesn't align creates real coordination problems.

Standard California escrows close in 30 days. Cash transactions can close in 14–21 days if both parties want to move quickly. A buyer who needs 45–60 days may have legitimate reasons — a job relocation, a concurrent sale — but it means your home is off the market for longer before you have certainty.

Rent-back provisions — where you remain in the home for a period after closing — can be part of the negotiation if you need more time to secure your next home. Many buyers will accommodate this, particularly if it means winning a competitive offer situation.

When You Have Multiple Offers

Multiple offers are the outcome of correct pricing and strong presentation. How you manage them determines your final result.

One approach: call for highest and best. Set a deadline — typically 24 to 48 hours — and invite all buyers to submit their best offer by that time. This creates urgency, prevents buyers from holding back, and gives you a clean comparison point.

A variation: counter the strongest offer while holding the others in backup position. This is more surgical — it rewards the buyer you've identified as strongest and keeps your options open if that deal falls apart.

What I've seen go wrong: sellers who announce a multiple offer situation without managing it strategically. Buyers who know there are other offers sometimes escalate well beyond what they'd otherwise pay. Others withdraw entirely, not wanting to compete. How the situation is communicated and structured by your agent is as important as the fact of having multiple offers.

Never reveal your bottom line to a buyer's agent. Never indicate how many offers you have or what they're offering. Let the structure of the process do the work.

The Offer You Shouldn't Automatically Reject

A below-asking offer from an all-cash buyer with no contingencies and a 14-day close is often more valuable than an above-asking offer from a buyer with 5% down, a financing contingency, and an FHA loan.

Run the math on the actual net — accounting for the difference in certainty, the difference in timeline, and the carrying costs of a longer escrow — before you reject an offer based on price alone.

One situation I frequently see in Arcadia and San Marino: an international buyer's family member submits an offer that seems low relative to the list price, but the offer is all cash, the close timeline is aggressive, and there are no contingencies. Sellers who dismiss this without careful consideration sometimes watch the same buyer go next door and close quickly on a comparable property.

FAQ

Should I always accept the highest offer?
Not necessarily. The highest offer needs to be evaluated against its financing strength, contingency structure, buyer qualifications, and close timeline. A higher offer with meaningful financing risk can produce a lower net result than a slightly lower, cleaner offer.

Can I counter multiple buyers at the same time?
In California, you can issue a Multiple Counter Offer (MCO) to more than one buyer simultaneously. The MCO is not binding until you sign back one accepted version. Your agent should handle the legal mechanics carefully.

What if the best offer is from a buyer with FHA financing?
FHA buyers are fully qualified buyers. The considerations for sellers are primarily related to minimum property condition standards (FHA appraisers may flag items that conventional appraisers don't) and the slightly longer FHA loan timeline. These are manageable — not disqualifying.

How long do I have to respond to an offer?
California purchase contracts typically include an acceptance deadline set by the buyer — often 1–3 days. You are not legally required to respond before that deadline, but failing to respond in a reasonable timeframe risks losing the offer.

What happens if the appraisal comes in low?
If the appraisal comes in below the purchase price and the buyer has an appraisal contingency, they can renegotiate or exit the contract. Options include: reducing the purchase price to the appraised value, the buyer covering the gap in cash, or a combination. An experienced agent will have discussed this scenario with you before offers arrive so you're not surprised.

If you're preparing to sell in Arcadia, San Marino, Temple City, Pasadena, Walnut, or anywhere in the San Gabriel Valley, I'm always happy to walk through your options and share what's happening in the current market.