Getting an offer on your home is very exciting. Then you open the offer and realize it is not what you were expecting, and you are wondering what to do next. Answering an offer which is not acceptable is a matter of strategy. When you receive an offer, take charge and direct the process. Here’s a list of questions to ask when you receive an offer.
- Deposit: How much and who has it? (Is it a serious offer, as evidenced by a sufficient deposit?)
- Price: What exactly are the buyers offering?
- Down payment: Cash or gift money from a parent?
- Terms: Cash purchase or will the buyer need a new mortgage?
- Occupancy: How soon do I have to get out?
- Contingencies: Is there anything that could weaken the deal?
As you go through these questions, be sure you understand the answers that are given to you.
Usually, offers aren’t great or terrible. They’re somewhere in between. List the pros and cons of the offer so you can see what the trade-offs are. Once you have decided what you will accept, here are a few approaches to handle the offer.
Counter: The most common way to respond to a low offer is to send the buyers a counter offer. You can counter at the list price and terms or come down and offer something in between list price and the offer.
Highest and Best: This strategy allows the buyer to revise their offer, should they choose. This is most often used in a multiple offer situation but works just as well with a single buyer who needs to know their offer isn’t acceptable.
Include Terms in Negotiation: The price is not the only part of an offer which can be negotiated; the terms can also be changed. Sometimes a seller can get a higher price by offering longer escrow or including appliances.
Reject the Offer: There is no reason to respond to an offer which isn’t even close to acceptable. A sell can reject the offer altogether.
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