How to evaluate an offer on your home
When an offer comes in your property, Mr. & Mrs. Seller, here's what you can expect when we sit down together to go over it.
Market Trends Report - The first thing we'll do, before we even look at the offer, is to examine an updated Market Trends Report for your local area that's similar to the one I prepared for you when we listed your home. It's the best way I know of predicting whether the market is likely to improve or decline in the coming weeks. Understanding current market trends may influence how you respond to this offer.
Competitive Market Analysis (CMA) - Additionally, we'll review an updated Competitive Market Analysis (CMA) to find out the specifics of nearby home sales that have occurred since the last CMA I prepared for you, as well as any details about active listings that are your current competition.
Anatomy of the OFFER - Then we’ll take a look at the anatomy of the offer by considering the contract terms most likely to impact your decision:
1. Price
2. Selling concessions (subsidy)
3. Net proceeds (your bottom line)
4. Financing, including buyer's qualifications
5. Settlement and occupancy dates
6. Inclusions/exclusions
7. Contingencies, if any
Yes, there will be other details to consider, but these Big Seven are the bare bones of the offer, the factors that tend to have a "make it or break it" effect on any home seller's decision regarding an offer.
Some sellers find it helpful to rate each of these major items with a score of 1-3, knowing that any offer scoring 19-21 is a definite keeper; a score of 15-18 is a very good offer that you should perhaps take seriously, depending on the market trends and CMA we discussed earlier; and, finally, you will most likely counter-offer anything with a score below 15 - at least on the factors at the top of your priority list.
What happens next, you ask...
After a determination is made about these Big Seven, we'll review the entire offer from start to finish, including any addenda and disclosures. As we do, I'll take notes about any missing or unsatisfactory details so we can consider them together at the conclusion of the contract review. I will make recommendations that are based on my professional experience, but you will have full control over the decision to accept, reject or counter-offer - and what ’s included (or not) in any counter-offer.
While there are many details to every real estate contract, most of them are so-called standard practices. If you and the buyer agree about the bare bones of the offer, a SOLD sign is probably in your future!
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