When a listing gets several offers, the seller's first question is usually "which one is highest?" The better question is "which one puts the most in my pocket, and how likely is it to close?" Those can be different offers.
Here is a simple process for comparing offers that you can walk a seller through the same day. It is general information, not legal advice.
Step 1: Put every offer in the same table
List each offer side by side with the same rows: price, seller credits, financing type, down payment, earnest money, pre-approval or proof of funds, inspection, appraisal and financing contingencies, home sale contingency, appraisal gap coverage, closing date, and rent-back or possession terms.
Where an offer says nothing, write "not stated". A missing contingency is not the same as a waived one, and filling gaps with assumptions is how comparisons go wrong.
Label offers neutrally (Offer A, B, C) and leave out anything personal about the buyers. More on that below.
Step 2: Turn prices into the seller's net
Net = price − seller credits − commission − mortgage payoff − other selling costs
Two things trip agents up here:
- Credits: a $472,000 offer that asks for $8,000 in credits is a $464,000 offer before costs.
- Commission is a percent: a $5,000 higher price adds less than $5,000 to the net.
If any offer has an escalation clause, work out its final price first. Our guide to escalation clause math covers the rules, including two clauses competing against each other.
Step 3: Rate how likely each offer is to close
A simple HIGH / MEDIUM / LOW rating with one line of reasons is enough. Weigh:
- Financing: cash with proof of funds is the most certain. A pre-approval and a larger down payment are stronger than a pre-qualification letter.
- Contingencies: each open contingency is an exit for the buyer. A short inspection period is less risk than a long one, but it is still an exit, not a plus.
- Home sale contingency: usually the biggest risk, especially when the buyer's home is not even listed.
- Appraisal: a financed offer well above list price may appraise low. Check whether the buyer has committed cash to cover a gap. Call the uncovered part "potential exposure if it appraises at list", not a known gap.
- Earnest money: a larger deposit signals commitment.
- Timing: does the closing date fit the seller's move? Is a rent-back offered or needed?
An offer without a pre-approval or proof of funds should not be rated HIGH, whatever the price.
Step 4: Show the realistic downside
For a financed offer above list with no appraisal gap coverage, also show the net if the price had to drop to list. That is the seller's realistic floor, and it often changes the conversation.
It also helps to show what a counter would be worth. If a cash offer is more certain but nets less, work out the price it would need to match the higher net. Because commission is a percent of price, the formula is: price needed = (target net + payoff + other costs + credits) ÷ (1 − commission rate). For example, to match a $223,200 net with a $212,400 payoff, $4,800 in other costs, no credits and a 5% commission: ($223,200 + $217,200) ÷ 0.95 ≈ $463,600.
Step 5: Lay out the options, not a verdict
The seller decides. Your job is to make the options clear:
- Accept one offer as written.
- Counter one offer, naming the terms that would make it stronger.
- Ask every buyer for their highest and best, following your local rules and brokerage policy.
- Reject an offer.
- Keep a strong runner-up as a backup offer, where local practice allows.
Then give your lead recommendation in one or two sentences tied to the numbers.
Leave buyer letters out of it
Buyer "love letters" often reveal things like family status or religion, which are protected under fair housing law. Many brokerages advise not passing them to the seller at all. Keep the comparison on price, terms and certainty, and check your brokerage policy.
Faster ways to do this
The free escalation clause calculator gives you final prices and seller nets for every offer in your browser.
If the appraisal comes in low, the free appraisal gap calculator shows the buyer's cash and the seller's price for each way out. If you use Claude, the Offer Comparison skill does the whole process from pasted offers: the side-by-side table with "not stated" gaps, the net for each offer, escalation math, closing-risk ratings, the downside net, the seller's options and a plain-language summary to send. Buyer letters are left out automatically, with a note explaining why.