A Quick Guide To Reviewing & Accepting An Offer On Your Home
Negotiation is a fine art and typically works best when both parties get what they want. For example, you may be willing to take less money for your home in exchange for an all-cash offer or a quicker closing. Your buyer may be willing to pay your asking price, but they may ask you to pay their closing costs.
Before considering your buyer’s offer, make sure they’re a serious buyer. Ask your agent to provide proof that the buyer has been prequalified by a lender or has other means to purchase your home such as a preapproval letter or letter of credit.
Once an offer is officially made, ask yourself, “is this reasonable”? If you’re uncertain, ask your agent to explain the offer. If the offer isn’t what you expected, your agent can explain why. For example, a nearby home may have recently sold for less than your asking price and your buyers feel you should sell for the same. Be prepared to defend your price by showcasing your home’s condition, updates, size, and other advantages.
Considering the offer
A serious buyer will offer close to what you’re asking, but may have a few demands and contingencies. A buyer may ask you to reconsider an exclusion, such as a fine chandelier or custom piece of furniture, because of it’s decorative importance to the room. Based on the offer received, you will know if that’s a reasonable request.
Sometimes buyers find your home before they are ready to move. For example, a family may be transferring from another state and need to find a home quickly. Common requests in scenarios like this are asking you to delay closing or rent back the home and charge you rent until they can move in. You can confirm this with their relocation company and decide if this is reasonable for you to allow.
Special requests should be accompanied by a respectfully high offer price. Are the price and terms the buyer is offering reasonable, given your home’s position in the marketplace?
Negotiating the offer
Buyers will only pay what they believe your home is worth. They respond exclusively to price, location, and condition. What you paid for the home or the equity you need out of it, aren’t relevant to the buyer. It’s simple, homes in top condition sell for the most money. If you’re not receiving the offers you’d like, then condition is likely affecting the price. Ask your agent which repairs and updates would increase your property value the most. After making those changes, then reconsider your price. You can also counter with a carpet allowance, offer to pay HOA fees, or offer some other concession that will please the buyer.
Your agent can’t tell you what to ask for your home or what you should accept, but he can tell you what you can do to improve your negotiating position. Keep in mind that your purchase offer is only binding when you agree to the buyer’s terms or the buyer agrees to your counteroffer. Every change you or the buyer makes means the other party can walk away from the deal entirely.