Offers and Counter Offers

Offers and Counter Offers

You have just received a phone call from your real estate
agent telling you that an offer is coming in. Your response
is to suddenly think of many critical questions:

Who is making the offer?
Are they eager?
When will the offer be ready?
Do you think they are serious?
Why are they interested?
Do you think they will offer full price?
Are they qualified?
What is their time frame for moving in?
Have they made an offer on anything else?
Do you think they are committed to buying this house?
Do they have a house to sell?
Will there be any contingencies?
The list goes on. If these or any other questions matter to you,
then write them down. In time, it is likely that some or all of
them will be answered. At this early stage, though, the most you
can do is wait until the offer is completed and ready to present.
Assuming the offer is being delivered by the buyer's real estate
agent, you can expect that the agent will arrive at your house
without the buyer in tow. Find a comfortable location in the house,
settle in, and expect to hear the good news!

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The Presentation of the Offer

As part of the presentation, the agent usually will introduce the
buyer to you in greater detail. It is normal for you to learn what
their primary source of income is, where they are moving from, whether
they have children, why they like your house, what their time frame is,
and how they plan on paying for the purchase. The intent here is to
help you to take a personal interest in the buyer. Negotiations have
a better chance of ending in a positive resolution when the two parties
take a personal interest in one another.

Once the introductions are over, the agent should present you with
a contract that includes the price and terms of the offer. Be prepared
for anything! No matter how eager the agent has told you that the buyer
is, it is still very possible that the offer will come in well below
what you are hoping for.

If it does come in low, put your emotions aside and consider all of the
information that the agent has supplied you. The qualifications of the
buyer are as important as the offer. If the buyer can afford the property,
is motivated to move, and is truly interested in owning the house then
you have a good chance of working something out. Stay focused on the shared
objective: you want to sell and he wants to buy.

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Making the Counter Offer

You like the buyer and you sense that the sale could consummate if the
two parties can work towards a mutually satisfying agreement. LConsult
your real estate agent, talk with your partner and prepare a counter offer.
Make sure that you review the entire offer carefully before you work on
the price adjustment, since it is easy to become so focused on price that
you neglect to notice the other conditions that the buyer has put on the
sale. Often, the counter offer is written on the same form as the original
offer, meaning that the details of the original offer will transfer directly into your counter offer
and could eventually become binding.

Your counter offer will depend on the market, your needs as a seller, and
the advice of professionals who are less emotionally and personally involved
in the transaction, such as your real estate agent or your attorney. The most
difficult point to remember is that you are not the one who sets the price.
The market sets the price, meaning your home is only worth what someone will
pay for it. If the buyer has been looking for some time and has taken a genuine
interest in your property, then you can assume that they are making the offer
with some level of legitimate knowledge about what homes in the area are worth.
That doesn't preclude the buyer from trying to get the best deal possible. It
simply means that the offer is at the least representative of the lower part
of the range that similar houses are valued at given market conditions. You
are being asked to work within a range that extends from the buyer's offer to
your price. The simple question you must start with is whether you are willing
to accept that range and negotiate accordingly.

Another choice you have in responding to a low offer is to reiterate your
original listed price. In effect, you are rejecting the offer by standing
firm. This can be a wise decision if the offer is simply too low to take seriously.
Sometimes a buyer will re-submit the offer at a slightly higher price, which moves
the offer into a range that you can now feel comfortable negotiating in.

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Coming to Final Terms

It can take minutes, hours, and even days for the two parties to reach an
agreement. If you have come off your price to make the deal work, you might feel unwilling to make
any other additional compromises. The key at this final stage is to always
remember your goal of selling the house so that you can move on with your
life. Stay reasonable and remain in the mode of discussion and compromise.

Once there is a final agreement that can bind the two parties, both sides
must sign the contract and money will change hands in the form of an escrow
deposit. From this point forward, the success of the transaction will be
influenced more by the outside parties, such as the home inspector and the
lender, than by either the buyer or the seller.

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