Congratulations! You’ve received an offer. Let the negotiations begin.
Once you receive an offer, you have several options when responding:
→ Accept → Reject → Counter
How you respond to an offer will depend on your motivation and leverage. Is it obvious the buyers are in love with your home? Is your timeframe to sell a factor? How long has your home been on the market? Do you have multiple offers or just the one?
In addition to your own motivation and leverage as a seller, you’ll want to consider that of the Buyer through the following:
The Offer Price
In most markets, a general rule of thumb is to accept an offer that is within 3-5 % of your asking price, you’re best to accept or counter the offer.
Financing
Consider Buyers financial position. Are they pre-approved? Are they asking for closing costs? Are they paying cash?
Contingencies & Timeframes
Review the specific details of the contract such as the Buyers contingencies for the sale of a home, inspection, financing and closing timeframes, etc.
Your REALTOR can help you understand these key points and offer guidance on how to best respond to the offer. It’s always best to respond rather than reject an offer.
If you accept the offer, then everyone begins removing contingencies and heading towards closing on the sale of your home.
If you reject the offer, you have absolutely nothing to work with and potentially a lost sale.
Remember, it’s always better to respond to an offer by countering rather than rejecting it. You can counter on price, contingencies, dates, etc….whatever points you feel need changed.
Low Ball Offers
Buyers make lowball offers all the time for all kinds of reasons…an investor looking for an awesome deal; a Buyer who is unrepresented by a REALTOR and unfamiliar with prices of homes in the area; buyer with a distorted reality of what they can get for their money.
There are a number of reasons Buyers make lowball offers. As a Seller it can be frustrating, insulting, and emotional. Granted, not every lowball offer deserves a response. However, are you willing to take the chance?
What if they are just an unrepresented, uneducated Buyer who doesn’t understand the process or the market? What if they’re a Buyer who is just throwing out a starting number? What if…What if…What if…What if…
One of the most difficult things for a seller to do is respond to the “Lowball Offer”.
In most cases, it is advised to at least make a counteroffer rather than reject an offer. It might just turn into a successful sale.
Once negotiations are complete and all terms and conditions agreed to are in writing, the offer is signed by both parties and becomes a legally binding contract.
Your first offer is typically your best offer! Don’t lose it.