You’ve received an offer on your property. Awesome! Now what? It’s important to negotiate real estate offers to earn the best price and terms on the sale. Here are some insights you can use to accept the best offer on your property.
What happens when a Offer is Received?
Once an offer is made, your Realtor will present the offer to you from the buyer’s agent. The offer details typically include:
- A purchase agreement. This will become the binding sales contract if the offer is accepted.
- Proposed terms of the deal, like purchase price and whether the deal is contingent on a mortgage approval, septic or home inspection.
- Proposed closing date.
- Amount for earnest money deposit, which is monetary the buyer puts down to show they’re serious about the purchase.
- Provisions for inspections.
- Other Contingencies, including home inspection or sale of the buyer’s home.
- Bill of Sale, this will be include appliances and other items (such as furniture) the buyer may ask to be included in the sale.
Together with your realtor, you’ll review the details of the offer to determine if the terms are acceptable. From this point you can either accept, negotiate or decline the offer.
How long do home sellers have to consider an offer?
There is no standard deadline to respond to an offer — and it’s pretty uncommon for a buyer to stipulate one.
Should a seller ever accept the first offer?
Accepting the first offer can be a big decision for some sellers. Sometimes a motivated buyer will make a strong offer for a new property on the market because they want to secure it. Sometimes a first offer can end up being your strongest offer. Here are a few reasons why you may accept the first offer:
- The purchase price and terms are acceptable to you.
- The proposed closing date is acceptable.
- The buyer has waived common contingencies.
- You don’t want to deal with additional showings or open houses.
Some sellers may wonder if they wait long enough, a better offer will come in, however sometimes a good will be your first offer. It’s important to discuss with your Realtor early on about your ultimate goals for selling before you list the property. That way, when the right offer comes in — either after one day or one month — you will be ready to confidently accept it.
When can I decline an offer?
If you feel as though a buyer will never compromise to meet in the middle, it may be time to reject an offer. A buyer always has the option of making a second, revised offer.
What is a counter-offer and how do I make one?
If you receive an offer on your home that isn’t quite aligned with your goals, you may make a counter-offer. In a counter-offer, you are implying that you will accept the buyer’s offer, subject to one or more requested changes. A counter-offer is typically a one page document that changes one or more conditions of the original offer and becomes an “addendum” to the original offer. It’s not uncommon for buyer and seller to go back and forth with several counter offers. With a counter offer, the original offer will be part of the purchase agreement along with any counter offer forms.
What if I receive multiple offers?
It’s possible that you’ll receive multiple offers on your home. In fact, some home sellers actually try to attract multiple offers with the hopes of being able to choose the best bid for the final property sale.
When facing multiple offers, you’re at a clear advantage — so sit back and determine the best purchase price and terms for you. Here are a few ways to react when you receive multiple offers:
- Review all bids and choose one. Go through all offers on the home, keeping in mind that you may want to look at more than just the price. To find the best bid, you’ll also want to consider the all-around terms of the offer. You may find that one standout offer is too good to resist and decide to accept it.
- Ask for a final offer. If the bids are close together, or you believe you can negotiate an even better price or terms, you can request for some or all buyers to submit their best and final offers.
- Counter-offer. Rather than asking buyers for their best offer, you could also submit a counter-offer to a buyer who is close to your desired price or closing time, but not quite there.
How to negotiate a better selling price
The easiest way to negotiate as a seller is to make a counter-offer in response to single or multiple offers, then simply wait to see if the counter is accepted. But risk-takers may prefer to go the route of asking for blind “best” offer — after all, an eager buyer may go even beyond the sale price or terms you had in mind.
Do sellers ever reject offers for the asking price of a home?
Price is just one element of a contract, so it’s certainly possible for a seller to view a list-price offer and still reject it based on other conditions stated within the offer.
When the market (or market-segment such as a certain price point) favors sellers, you may hear about multiple offers driving prices up so that sellers receive even more than their original asking price. In a market that favors sellers, some may hope to earn more than their listing price at closing — and as a result, they may be inclined to reject their initial listing price from a buyer.
We recommend pricing your home so that you’d be pleased with a list price offer and view anything above it as a bonus. That way, you don’t set yourself up for disappointment, and you don’t irk buyers who are working in good faith to get approved for list-price offers.
