Special offer

Anatomy of An Offer on Your Home

By
Real Estate Agent with Long & Foster Real Estate, Inc.

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. 

xray - iclipart

 

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 contractmost 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!

Posted by

This infoMargaret Wodarmation was provided to you by Margaret Woda, an Associate Broker with Long & Foster Real Estate in Crofton Maryland. Contact Margaret today for general real estate information or to learn how she can help you buy or sell a home in Annapolis, Bowie, Crofton, Davidsonville, Gambrills, and Odenton. 

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Comments(20)

Tim White
Coldwell Banker Woodland Schmidt - Hart, MI - Hart, MI

That's a down and dirty, direct and to the point synopsis, Margaret. Just my style. Thanks!

Apr 21, 2009 02:58 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Margaret,

Great organization of factors. I love the "Big Seven" list.

Apr 21, 2009 03:05 PM
Rebecca Gaujot, Realtor®
Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

I llike the title of this post...also like the 5-step synopsis. I'm going to mark it for a feature.

Apr 21, 2009 03:05 PM
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Margaret:  When an offer comes in that can be an emotional time for a seller, depending on how desperate he or she is to sell. In times of high stress it helps to have some sound guidelines.  I like your list of seven. I think it would having a grounding effect on a tense situation.  Good post.

 

Apr 21, 2009 03:19 PM
Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Man...I'd hire you in a hearbeat to be MY REALTOR! Oh, but I am one....so I'll just hope I can oneday refer someone to you....I know they will be in the best of hands!

Thanks for the big 7....Good idea...now I just need a contract on one of my listings so I can use it!

Apr 21, 2009 03:20 PM
Katerina Gasset
The Gasset Group & Get It Done For Me Virtual Services - Provo, UT
Amplify Your Real Estate & Life Dreams!

Margaret- Ahhh, that sounds so normal!

Ours tend to go something like this these days:

Multiple offers come in,

we determine with seller which one is the most likely one to be get third party approval on, it gets signed.

We don't need to look at the market because we priced it 10% below the last sold in the neighborhood.

We don't need a CMA, we need a hardship letter and a good violin.

The all the work and waiting begins........

Apr 21, 2009 03:33 PM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

As a follow-up, let me explain that I arrive at the appointment having already reviewed the offer, with all of the "Big Seven" identified.  (Then I sneak a peak at the expectations - not hopes - written down at the contract presentation, and more often than not the offer scores pretty well based on 3 points for "meets expectations")

Apr 21, 2009 03:35 PM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Katerina - Yes, it's pretty normal here.   I work a very different market than you do!

Thom - Any day now, I feel an offer coming on...

Claudette - That's exactly what this does.

Rebecca - Thank you!

Wayne - It really does take the pressure off sellers if we address those items first because a 55-page contract (not unusual) can look quite overwhelming.

Tim - 'Recently discovered your blog and really enjoy it.  I'm a new subscriber!

 

Apr 21, 2009 03:39 PM
Fran Gaspari
Patriot Land Transfer, Inc. - Limerick, PA
"The Title Man" - Title Insurance - PA & NJ

Margaret,

Good coverage of a very important processs...!!! Thanks,   Fran

Apr 21, 2009 04:15 PM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Margaret I like your Big Seven in reviewing an offer then ultimately coming up with your next step. Agreed that it is the seller's not the Agent's decision in the end as to what to do.

Apr 21, 2009 04:28 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Margaret:  This is great !  Very organized, very succinct, very professional.  I bet your sellers just love you to pieces !  Thanks for sharing...

Apr 21, 2009 07:49 PM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Margaret, this is such great information, and you make it all very understandable!

Apr 21, 2009 08:56 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Margaret,

Well said.  I also love the big seven.  I think at times even the agent let their emotions run wild.

Apr 21, 2009 09:14 PM
Bruce & Mary Smith
Savannah Lakes Homes - McCormick, SC
REALTORS, Savannah Lakes Village McCormick SC

Margaret - That's such a great list!  Thanks!

Mary

Apr 21, 2009 10:51 PM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Bruce and Mary - This breaks down the process for sellers, so that 55-page over doesn't seem so threatening.

Richard - The scoring process sometimes surprises even me.

Patricia - We may be conducting the orchestra, but the seller needs to feel confident that he is playing first violin.

Karen Anne - As a teacher at heart, I'm sure you do something similar.

David - Having this list, and setting expectations up front, is a good way to keep the nerves and fears out of reviewing an offer.

Gary - I like the way my new dentist tells me what to expect before he puts his hands in my mouth, and this is the same idea.  Tell them what to expect, do it, and then wrap up with the counter-offer.

Fran - You're welcome!

Apr 21, 2009 11:08 PM
Linda Greco Rich, ABR, SRES
Exit Preferred Realty - Bel Air, MD
Harford County Specialist

Margaret - I love your anatomy lesson. Sellers need this lesson to make good decisions. It's out job to guide them and their job to decide.

Apr 22, 2009 12:01 AM
Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375
Flexit Realty "Flexible Home Selling Solutions" - Grand Rapids, MI
Real Estate Services You can Trust!

Hi Margaret, that demonstrates why you are such a whiz....people see it, know it and love having your represent them because you are thorough and help them understand every aspect of the process.  Great Post Margaret.

Apr 22, 2009 10:55 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Margaret, this is a wonderful presentation of the negotiating process. I just took a class that outlined something similar to your 7 steps and it really helps sellers not be so emotional about the offer.

Apr 22, 2009 03:07 PM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Frank & Sharon - I actually came up with this process for one case... the sale of my 85 year old mother, a former real estate agent herself.  I knew it would be hard for her to "let go" of her house and the transaction, and this worked like a charm.  She could breathe BEFORE we started on the 50+ pages, because she already knew the offer scored a 20 - a definate "no brainer" that she would accept.

Gary - Thank you!  Now, if I could just get MORE listings so there would be more opportunity to put this to work...

Linda - The contract worksheet does what the pre-settlement inspection form does - keep clients "on track"

Apr 22, 2009 10:27 PM