Offer Basics & Negotiations
We will let you know as soon as an offer is received on your property and set up a meeting to review it with you promptly. Now this is where things get exciting. You’ve got an offer or maybe two or three at once! We will review all the terms and conditions and represent your interests during the negotiations to ensure you are optimizing the price and conditions surrounding the sale of your home.
The offer you receive will include: the legal name of the potential buyer(s), the legal name of the seller(s), the legal civic address of the property, the price the buyer(s) is offering to pay, desired inclusions (items in or around the home that the buyers wish to have included in the sale, such as appliances, lighting fixtures or window coverings), amount of the buyer’s deposit, desired dates the potential buyer would like to take legal and physical possession of the home, possible “conditions” upon which the contract becomes final (such as satisfactory home inspection report or financing approval), and the date the offer expires.
You can respond to an offer in one of three ways:
1. Accept as is: your signature finalizes the contract and it becomes a binding legal contract.
2. Counter offer: you may make changes to the offer, such as adjustments to the price, closing date or conditions. When you do so, the prospective buyer may accept, reject or make another counter offer in response. Only when one of the parties signs an unconditional acceptance of the other party’s offer does it become legally binding.
3. Rejection of the offer: you may simply reject the offer and the sale will not go through.
The buyer can withdraw an offer until the moment you accept in writing. If you are evaluating an attractive offer, it’s important to note that timeliness is important.
Once both parties come to an agreement the offer is considered “accepted” and they will have a set period of time in which to satisfy the legal conditions agreed to in the contract, such as completing a satisfactory home inspection report or securing financing. Only after all conditions are removed do you have a legally binding document.
Fullfilling the Conditions
Conditions usually have a set period of time for removal. If an offer is conditional on financing, the buyers may be preapproved so they simply need to have the approval applied to your property and the removal of this condition is fairly swift and easy.
If the offer is conditional on a home inspection, the buyers would request permission for a professional home inspector to spend 3 to 4 hours thoroughly checking out your home. The buyers usually accompany the inspectors as well. The inspector will produce a summary of their findings, and if the buyer is happy with them, they’ll waive the inspection condition.
If it turns out that the buyer can’t, for whatever reason, fulfill the conditions, the offer is null and void. Not ideal, but not the end of the world. We’ll get right back out there and find you some new potential buyers.
Once the conditions are met, the buyer signs a waiver and the deal is firm. If you’ve completed all these steps, then you are a successful home seller.
An offer is considered firm once all conditions have been removed by both parties. The typical condition removal period is one week to 10 days, or as agreed to in the offer.
Price is only one of many factors to weigh as you evaluate and negotiate an offer. Every situation is different. While you may be motivated to secure the optimal price given current market conditions, you may also need to weigh other considerations such as the convenience of the buyers’ desired completion, possession dates, their desired inclusions, the number of conditions attached to the offer, and the amount of the deposit. We will help you assess each incoming offer to determine whether it’s the right one for your unique needs and circumstances.
With some investigation, your associate may also be able to help assess the potential buyer’s background and goals for purchasing a property, which may assist you in negotiating a competitive price. For example, a buyer who has already sold his/her home and needs to move within a certain time frame may be willing to compromise on price if they can negotiate a date that coincides with the completion of their home sale.
This is the optimal position to be in as a seller – receiving multiple offers at the same time for your property. Although this is the optimal position, the process must be handled with skill and precision to achieve the highest sale price possible.
In high-demand, low-inventory areas, you may find yourself in a situation where there are several offers for your home. Some sellers in high-demand niche markets may also intentionally list their home at a low price hoping to stimulate multiple offers. This does not necessarily mean the price will be bid up significantly over the asking price, but it does mean that due diligence will be required on your part and the part of your REALTOR® to ensure you properly assess the strength and limitation of each offer, negotiate strategically to maximize the value you are able to get for your property, and to ensure you are protecting your legal interests in what may be a time-sensitive and complex negotiation process.
Now that you’ve mastered this step of the selling process, read about what still lies ahead in the next chapter on Closing the Deal.