How and When to Accept an Offer
This is part 5 of a series of 6 articles that guide homeowners through the home selling process. These articles provide insight and suggestions to help homeowners sell their homes.
Step 1: You’re Ready To Sell Your Home
Step 2: How To Price Your Home To Sell
Step 3: The Property Disclosure Statement Explained
Step 4: What To Do With Your First Offer
Step 6: What To Expect When You’re Closing
Accepting an offer on your home legally binds you to sell your home to that buyer. If you reread the purchase agreement after accepting and find that there are parts of it you are not happy with it, it’s too late to back out. Failing to live up to a contract you signed could put you in legal and/or financial trouble.
Don’t rush when reviewing an offer, even if you have many to look through. There is more to a perfect offer than bid price. The offer that catches your eye will probably have the highest overall bid price but does it include a preapproval letter, and what are the contingencies? Many buyers will include contingencies such as the sale of their home, seller pays closing costs, and appliances included. You never know what a buyer will ask for in the contract so make sure you and your First Team Real Estate agent read through it carefully.
If you only have one offer and you’re hoping to sell your home sooner rather than later, then a counter offer is the best way for you to protect your interests.
A counter offer is more than just asking for more money than is offered, it is also specifying contingencies and concessions you are willing, or not willing, to make. If the buyer wants you to include the swing set in the backyard and you want that for your grandchildren, you reject that contingency in your counter offer. In the state of California, you and the buyer are allowed to exchange as many counter offers as you like.
A counter offer exchange for a $500,000 home may be something like this, although not in the same format:
- Buyer’s offer: $450,000
- Seller’s counter: $490,000 + refrigerator and deep freezer
- Buyer’s counter: $465,000 + refrigerator and deep freezer
- Seller’s counter: $480,000 +refrigerator; deep freezer remains personal property
- Buyer’s counter: $475,000 +refrigerator; deep freezer remains personal property
- Seller accepts offer.
The concessions or contingencies you or the buyer make or ask for can be anything to do with the home and the selling process: closing costs, move in date, furniture, repairs, inspections, down payment amount, escrow company.
Tip: Make sure that the purchase agreement includes a cap on how much you are obligated to spend on repairs. When the home and pest inspections go through during closing, they might reveal repairs that could cost you more than you can pay. If the agreement you signed did not put a cap on what you are responsible for, you must pay all repairs regardless of cost to you or be in danger of breaching contract.
It is customary for your agent to work with the buyer or their agent on negotiations. You tell your agent what you want and they act on your behalf. You may be tempted to get in on the negotiations yourself but this is not an advisable course of action. By using your agent as your mouthpiece, you have the opportunity to be completely honest about what you want and what you think of a buyer’s offer without worrying about offending your home’s potential future owner and stalling negotiations. Trust that your agent’s experience in negotiating will most likely secure a better selling price for your home than you would be able to.
Once you have found or negotiated an offer you are pleased with, it’s time to sign the purchase agreement. You and the buyer’s signatures are a legal agreement to see the purchase all the way through unless one of you walks away under contingency. And, thus, the closing process begins. Closing day and the sale of your home is right around the corner.
