So, you’ve done everything right so far; you priced your home competitively, marketed aggressively, improved your curb appeal, and staged the interior to attract as many potential buyers as possible. Because you have followed all the right steps you have received an offer, or multiple offers to purchase your home. What do you do now? Well, a purchase agreement has many different elements to it; they all affect the offer, so each must be taken into consideration when deciding how to proceed.
There are three ways you can choose to respond to each offer. Your first option is to accept one offer in its entirety, basically agreeing to all terms and conditions set forth in that offer, and continue through the rest of the sale process with this buyer. The second option you have is to submit a counter offer, or multiple counter offers, if you are not agreeable to all parts of an offer, but are willing to proceed if the buyer will change those parts to suit you. Your last option is total rejection of an offer, or multiple offers. You would exercise this option if you already have an offer that is acceptable to you, or you have gone through the counter offer process with this buyer, but are unable to come to an agreement. It is unadvisable to reject an offer outright simply because the price is too low or they are asking for too many allowances. In these situations, it is wise to send a counter offer with terms that you find acceptable. Many times buyers are willing to pay more than what was stated in their initial offer, they are just trying to negotiate the best deal for themselves. You shouldn’t be insulted by a lowball offer; just see it as a starting point for the negotiations.
Most likely, the part of an offer that will get your attention first is the price. This aspect certainly deserves a lot of attention, perhaps more than any other element of the purchase agreement. However, this is not the only figure that will affect your bottom line, which is why all the other components must be examined as well. As we mentioned before, a low-priced offer shouldn’t automatically be dismissed; it might be a cash offer with a short escrow and very stable buyer. In this case, the buyer’s financial circumstances are important. A buyer may need to acquire new financing, a part of their down payment might be coming from the sale of another property, or they might be requesting seller financing. All of these can have a large impact on the quality of an offer. In the purchase agreement, the buyer can set a close of escrow date, determine who will pay for certain fees, request various inspections, set a limit for the cost of repairs, decide how much earnest money they are willing to deposit into escrow, set just about any contingency they choose, and list which personal property items they want to be included. Every aspect here is important, and must be carefully considered before making a decision. Unfortunately, these are only a few of the items from the purchase agreement that need your attention. Every item in the agreement is negotiable, so you have to take everything in, and look at each offer completely in order to make the best decision for you.
As for the negotiating process, you want to maintain an air of cooperation, keeping everything professional and courteous. Never be too rigid or demanding; something may be discovered in one of the inspections that will require further negotiation later, and you will want the buyer’s cooperation then. When you want something during negotiations, it is good practice to give the other party something they want in return, an exchange of negotiating chips. This can go a long way to getting you what you’re after, and the buyer sees that you are willing to cooperate.
With all the different parts of a purchase agreement that can impact your sale, the negotiating process can be overwhelming, especially if you aren’t familiar with every clause of the agreement. While an attorney would be best qualified to explain any of the language in the contract, and explain the legal repercussions, a professional real estate practitioner can walk you through this process and offer their expertise and experience in negotiating the sale of a home. If you would like our assistance with the sale of your home, or have questions about the negotiating process, please contact us.
