Offers

When a buyer has decided that your home is the one for him, he and his real estate agent will submit an offer on your home.

The offer process is more than just a buyer and seller negotiating on the purchase price for a house. Most likely, the buyer and his agent have gone over the “comps” (comparable sales in the same neighborhood or the immediate surrounding area) for your home, which we will have discussed when we listed your home and monthly after that. The comps have helped us to determine your listing price and will help the buyer’s agent and the buyer to determine how much they want to offer you for your house.

In addition to the comps, there are a number of other factors that will affect how much a buyer will submit his offer for a property:

• Amount of earnest money they’re putting down with the offer: this can show us how serious the buyer is about making his offer.
• Closing date: is the buyer asking for a closing date more than 45 or 60 days from the offer date?
• Length of Due Diligence Period, Appraisal Contingency Period, Financing Contingency Period and other contract timelines: the shorter and more compact the contingency periods are, the stronger the offer.
• Other concessions the buyer is asking the seller to make: is the buyer also asking for the seller to contribute to his closing costs? is he asking for the seller to provide a termite bond or a home warranty?

Once the buyer and his agent have decided upon the terms of his offer, the buyer’s agent will submit an offer on your house. Oftentimes the offer paperwork will consist of multiple documents:

• Standard Purchase Agreement: the main body of the contract, this document contains the “meat” of the buyer’s offer, including price, seller contribution to your closing costs, closing date, closing attorney, and any special stipulations.
• Lead-Based Paint Disclosure: homes that were built prior to 1978 most likely had lead-based paint; this disclosure acknowledges that and lets the buyer decide if he wishes to have a lead-based paint inspection (at his expense).
• Community Association Addendum: if the home is located in a neighborhood or condominium complex that has a homeowners association, this addendum states the monthly or annual fees and what they cover.
• Seller’s Property Disclosure: you will have filled out a Seller’s Property Disclosure Statement, which contains all of the information that you know about your property, during the time that you have owned the home; the buyer will review it and sign off, acknowledging that he has received it.

Once we receive the offer, I will present it to you and we will come up with a plan to respond to the buyer.

We will review the comps again, as circumstances in your neighborhood may have changed since we listed your home or since our last review. We will discuss each of the buyer’s terms and decide how to counter them in a manner that is satisfactory to you and your needs.

As the seller, you can counter the buyer on any of the terms of the original offer presented: everything from price to closing date to closing costs and other concessions requested. We will submit our counteroffer, in writing, to the buyer’s agent, and we will continue to trade written counteroffers until mutual agreement has been reached. We will try to anticipate the possible ways the buyer may respond when we write the counteroffer, in order to prepare ourselves ahead of time for how we might want to respond.

Throughout the negotiation process, we may trade responses with the buyer as many times as it takes to come to a mutual agreement. We may have one counteroffer; we may have five. Sometimes, on rare occasions, we cannot reach a mutual agreement and the parties will agree to terminate the offer and go their separate ways.

The key to a successful negotiation is to remember that neither side will “win”: both sides will make concessions and will need to compromise from their original expectations. However, both sides should feel like they are happy with the results at the end. It should be a win/win. After all, the parties are working toward a common goal: you’re getting to sell your house to a buyer who wants to buy it. Negotiations do not have to be contentious – they can be agreeable and friendly, as long as both sides remember that they’re both after the same goal.