You listened to your agent's input prior to putting your home on the market. You scrubbed, cleaned, removed personal items to storage, staged, painted, gardened, and in many other ways prepared your home for sale. When your home went on the market, you kept it clean, mowed the lawn, fixed things the second they broke, left the house for showings, and did everything as requested. And then you received an offer!!
The offer is such a key part of the process of selling a home. It feels like it's time to celebrate!
Here are a few tips about how to handle offers and what's important to know.
The "low-ball" offer
The home you love, that you have lived in perhaps for decades, and have taken the time to prepare for buyers... that's the home on which a buyer just submitted a low offer. Your first response might be to just say NO. How dare they? Don't they know what the home is worth? They just insulted you by offering much less than your list price. You don't even WANT them to have the house. They obviously wouldn't appreciate all it has to offer. But instead of immediately responding with a "NO," it would be more effective to put all emotions on the back burner and deal with the offer objectively.
The buyers want your house. If they didn't, they wouldn't have made any offer at all. Perhaps this is the first time they've ever made an offer on a home. Maybe their real estate agent didn't provide them with a good market analysis. Or perhaps they believe all offers should start really low because after all, you "never know!". Maybe they think they know more than their agent and they decided this was the number they should start with. You probably won't know what their motivation was for the low offer. But the point is, you have an offer in your hands, and you should try to make it work.
That doesn't mean accepting it as is. What you could do is respond with a counter-offer. Your real estate agent would be able to help you figure out what type of counter might work, but one strategy might be to come back just slightly less than list price. That would send the message that you are willing to negotiate but you're not giving your house away. There are instances where buyers and sellers countered many times, back and forth, and the seller wound up getting a price right around their listing price.
Other options might be to let the buyer know their offer was too low and is not acceptable as is. But if they are truly interested in your home, you would consider a better offer. This would also make it clear that you are open to negotiation, but only if their offer is reasonable. Or perhaps, if you have a "must have" limit, you could even say, look here's what I want, take it or leave it. All of these options keep the conversation going and could result in a price that is acceptable to you.
Isn't it all about the price?
Many sellers believe an offer is all about the price. But there are many components that may be important to you and all of those are negotiable. Let's say, for argument's sake, that you received three offers. All are at the list price. So how would you choose the "right" one if price is not a factor?
Closing Date: Are you in a hurry to sell your home? Do you need to be in your next location by a certain date? Or do you want to delay the sale as long as possible so that school is done, or your next home is ready? Choosing (or negotiating) based on closing date could be one option that would make or break an offer.
Inspection: Does the buyer want an inspection of your home? Are they doing the inspection for their information only? Or are they doing the inspection for the purpose of requesting repairs or deciding if they want to move forward? The offer that doesn't include an inspection contingency or a buyer that is just doing one for their information is a stronger offer.
Mortgage/Cash: There are so many different types of financing available. A buyer could come with a pre-approval for a VA, FHA, USDA, conventional or renovation loan for example. If your home has any kind of safety or structural issues, a VA or FHA loan may be tricky to get to the closing table. If the buyer wants to make updates to the home and is using a renovation loan, the timeframe to get to closing will be longer than a regular loan. If the buyer indicates they are using cash and have legitimate proof of funds, then that may be the best choice, depending on other aspects of the offer. So there are many factors to consider, even just with the type of financing.
Down Payment: The down-payment that is offered is also important. The buyer's down payment will go into an escrow account and be applied at closing as appropriate. If the buyer disappears without a trace and walks out of the deal for no reason, that down payment is often retained by the seller who has to put their home back on the market. Accordingly, the down payment is "skin in the game" for the buyer. With three same-priced offers, if one has a larger down payment, you may feel safer taking your home off the market for that specific buyer.
Other Items: Buyers could ask for other items as part of their offer. They might want you to leave that great lawn mower, lawn furniture, or armoire. They may want the appliances to stay or want them removed. Perhaps they want the roof repaired and the septic cleaned before closing. Or maybe they'll offer to take the house with the "junk" room intact and they'll get rid of those items. Any other requests could be reasons to select or reject any specific offer.
Getting an offer for your home is an exciting part of the home sales process. In order to move that offer to an accepted offer, which is the goal, it's important to not only look at price, but at every aspect. And if the price is way too low, negotiate anyway. It's quite possible that a low offer will end up being one that works perfectly for you.
If you're interested in selling your Monroe NY, Orange or Rockland County home, feel free to contact me at 914-419-0270 or email@example.com. I'd be happy to help you!
Originally posted at thehousekat.com.