The purchase offer serves as the first formal communication that ultimately leads to making a deal in a real estate transaction. Nuances of the negotiation, together with all relevant financial details, are taken into account by both parties prior to creating or accepting an offer, which makes it a critical step in reaching an agreement.
To help you understand what goes on during the offer acceptance process, here are several tips to keep in mind that will help you make the best, most well-informed decisions as a seller.
Fielding offers
Even if you’re selling a home in a hot seller’s market, preparation is still extremely important when you’re dealing with offers. Make sure you work with your listing agent closely to help you stay on top of the details.
Establish a deadline
To help attract more interest to your home, consult your listing agent to find out whether establishing a deadline for offers will be ideal, given current market conditions. The deadline should be set several days in the future so prospective buyers will be more motivated to close the deal.
Keep in mind that this strategy works best in a seller’s market where you can expect multiple offers as soon as your home enters the market. If you manage to get compelling offers right off the bat, then go ahead and accept the most appealing one, especially if you’re in a hurry to sell.
Know your limit
When deciding on an ideal asking price for your home, it’s important to consider the recent sales of similar properties within your neighborhood or area.
Don’t be surprised when you get offers below your asking price, and figure out how low of a price you’ll be willing to accept just to move the deal forward.
Remember to consider other important details based on your needs and make sure you set realistic limits ahead of time to help you make well-informed decisions based on logic, rather than emotion.
Consider the buyer’s financial position
Knowing more about the buyer’s current financial situation can help guide your decisions as a seller.
Find out whether a prospective buyer needs to sell their current residence before they can relocate, as this could affect the speed of the transaction. If you have a cash buyer, then this often translates to a quicker sale. If they will need a mortgage for the purchase, find out if they’re already preapproved.
Getting information about the buyer’s financial position can be especially helpful if you have multiple offers that are similar in amounts.
Choosing the best offer
Upon receiving an offer (or several), you have a lot of important factors to consider before accepting. Although the offer price is certainly one of the biggest factors, you have to consider other potential costs and expenses, and see whether the buyer’s timeline works for you as well.
A smart move is to take a look at the bottom line of the deal. If the buyer requests that you cover all closing costs, then you can expect to take home around about $5,000 to $25,000 less than your expected profit.
Factoring in contingencies
There are different types of purchase contingencies that could potentially delay a deal. If the sale is contingent on several factors included in the offer, the deal could fall through. Fewer contingencies outlined in an offer will make the deal more likely to reach closing.
Some of the most common contingencies include an appraisal and inspection contingency. A home sale contingency is also quite common, where the purchase of the home is contingent on the buyer selling their current residence beforehand. This can lead to some issues especially when closing is delayed or canceled indefinitely if the buyer’s home isn’t sold.
Countering an offer
Responding with a counteroffer to an offer placed by the first buyer comes with a certain degree of risk. They could accept outright, but it’s also possible for them to reject the offer and consider other homes instead. It could also mark the start of a prolonged back-and-forth negotiation between both parties.
It’s always best to consult your real estate agent to find out whether you should make a counteroffer and adjust major factors such as the price, moving date, contingencies, and closing costs. Remember to stick to your goals to help guide your decisions
Planning to list your home on the Palm Beach Gardens real estate market? Work with the finest local real estate experts by connecting with The Telchin Group! Call 718.788.5121 or send an email to Eric(at)TheTelchinGroup(dotted)com to learn more.