Home sellers who have chosen the right Realtor, prepared their home for sale and priced it right are strongly positioned for a smooth real estate transaction. Perhaps the most complex moment in the sales process comes when you get an offer for your home. Negotiating a real estate offer can be overwhelming but we are here to help!
How to Evaluate Purchase Offers
Ideally, the potential buyer or buyers have offered you closing to asking price or maybe a little more, along with the perfect terms for the sale. However, the reality is that not every offer will be immediately acceptable. You’ll need to carefully evaluate each offer and begin a negotiation thru your realtor with the buyers and their agent.
Your Realtor should be your partner and educate you on the terms of the offer and help you understand the offer and the housing market. You will need to know whether you’re in a Buyers market or a sellers market You’ll also need to estimate whether home prices are rising or falling in your area.
Before you begin to analyze your purchase offer, the most important step is to determine whether the buyer can fulfill the terms of the contract with financing. Your Realtor can check on the pre-approval letter that should be included with any offer by consulting with the buyer’s agent and lender.
What Factors Should You Consider in a Purchase Offer?
Once you know the buyer is pre-qualified for a loan, you should begin to evaluate the offer by looking at these factors:
- How close is the offer to your asking price?
- Will your home appraise for the contract price?
- Is there an earnest money deposit that accompanied the offer?
- What about closing costs?
- Has the buyer asked you to make repairs or to give a credit for home improvements?
- Is the requested closing date and possession date appropriate for your needs?
If you’re not immediately satisfied with the offer or are uncertain about whether to accept it, consider your options:
- Are there other offers?
- Can you wait for more offers to come in?
- How will you handle it if no other offers come in after a particular deadline?
Making a Counter Offer
As a seller, you have the options of accepting the offer as is, declining the offer, or making a counteroffer. Your Realtor can give you specific advice about your negotiating stance based on your home and your market. Generally, you will need to be prepared to compromise on some aspect of your home sale.
Your negotiations can go more smoothly if you have a clear sense of your own priorities, such as a particular closing date, or a minimum price that you need to achieve to meet your financial goals. Your Realtor should have prepared a document showing you net proceeds at different sales prices. This makes it easier to understand the value of different offers.
Negotiations proceed best when both you and your buyer respect each other’s needs and interests. Come to an appropriate compromise with the help of your Realtor.
Written by Darren Wilson at The Realty Firm
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