Join me over this sellers series as I walk you through the 14 steps of the sellers’ timeline.
Step 6: Getting an Offer – Negotiate, Counter or Accept. Get the most from your offer.
You’ve received an offer on your house, now what? You might feel so excited that you jump at the first offer you see, but there are some smart reasons to be thoughtful before you accept an offer.
It’s important to negotiate house offers to earn the best price and terms on the sale. Here are some insights you can use to accept the champion offer on your home.
- What to consider when selling your home
- How to approach a counter-offer
- Negotiating a house offer or multiple offers
- Setting yourself up to earn the best price for your property
- Accepting an offer on your house
- The steps after accepting an offer
What should I do when I receive an offer on my house?
If you’ve hired a REALTOR® to represent you during the home sale process, they will receive all offers on your home from agents representing the hopeful buyer(s). Once an offer is made, your Realtor will present you with the information from the buyer’s agent. The offer details typically include:
- A purchase agreement. This will become the binding sales contract if the offer is accepted.
- Proposed terms of the deal, like purchase price and whether the deal is contingent on a mortgage approval (vs. an all-cash offer).
- Proposed closing date.
- Amount for earnest money deposit, which is monetary collateral the buyer puts down to show they’re serious about the purchase.
- Provisions regarding title and inspections.
- Contingencies, including home inspection or sale of the buyer’s home.
Together with your agent, you’ll review the details of the offer to determine if the terms are acceptable. From this point you can either accept, negotiate or decline the offer.
How long do home sellers have to consider an offer?
Sellers will customarily respond to an offer within 1 business day unless they are traveling or otherwise indisposed. If the seller is on vacation, the listing agent will typically respond within one business day and inform the buyer’s agent that the seller may take longer to respond.
Should a seller ever accept the first offer?
Accepting the first offer can be advantageous for some sellers.
Here are a few reasons why you may accept the first offer on your for-sale home:
- The buyer’s monetary offer and terms are acceptable to you, or beyond what you were expecting.
- The buyer has proposed a timeline that works well for you.
- The buyer has waived contingencies, making for a smoother path to the closing table.
- The buyer has an all-cash offer and will not have to finance the purchase.
- You don’t want to deal with additional showings or open houses.
- You don’t think you’ll get a higher offer from anyone else.
Keep in mind that you could drive yourself crazy wondering if you left money on the table by accepting an early or first offer. It’s important to talk with your Realtor about your ultimate goals for selling before you list the home. That way, when the right offer comes in — either after one day or one month — you will be ready to confidently accept it.
When can I decline an offer?
Before rejecting an offer outright, be sure to discuss the decision with your Realtor. If you feel as though a buyer will never compromise to meet in the middle, it may be time to reject an offer.
However, it’s very important to keep in mind that if you reject an offer, your reasoning must be based on the terms of the purchase agreement. You cannot, under any circumstances, discriminate against buyers based on their races, religions or ethnic groups.
Sellers cannot discriminate against buyers
Although sellers have the right to accept or decline offers based on the buyer’s bid price or terms, a seller cannot decline an offer based on race, color, religion, gender, disability (mental or physical), familial status (families with children under age 18) or nationality of the buyer, as stated in the Fair Housing Act, which is a federal law that applies everywhere in the United States.
What is a counter-offer and how do I make one?
If you receive an offer on your home that isn’t quite aligned with your goals, you may make a counter-offer. In a counter-offer, you are implying that you will accept the buyer’s offer, subject to one or more requested changes.
A common tactic for sellers is to respond to a low bid with a counter-offer for the original list price. This shows potential buyers that the list price is what the seller intends to get for the property, and that it wasn’t a high-ball posting.
If the buyer agrees to your price or terms and signs the counter-offer, you’ve got a deal! Contrarily, the buyer could also submit their own counter-offer in response to yours, and the negotiation process would continue.
Navigating offers and counter-offers is a high-stakes game, and the process can be stressful and confusing as a result. Remember, your Realtor has deep market expertise and a history of negotiating the best deal for their clients, and you can lean on them heavily during this time.
Your agent will help you develop a plan so you’ll walk away from the sale with the best possible offer. A real estate agent will also take into account not only the terms, but also the likelihood of the buyer to be approved for the final home loan. By weighing these pros and cons, you and your Realtor can determine which bid to accept.
What if I receive multiple offers?
It’s possible that you’ll receive multiple offers on your home. In fact, some home sellers actually try to attract multiple offers with the hopes of being able to choose the best bid for the final property sale.
When facing multiple offers, you’re at a clear advantage — so sit back and determine the best purchase price and terms for you. Here are a few ways to react when you receive multiple offers:
- Review all bids and choose one. Go through all offers on the home, keeping in mind that you may want to look at more than just the price. To find the best bid, you’ll also want to consider the all-around terms of the offer. You may find that one standout offer is too good to resist and decide to accept it.
- Ask for a final offer. If the bids are close together, or you believe you can negotiate an even better price or terms, you can request for some or all buyers to submit their best and final offers.
- Counter-offer. Rather than asking buyers for their best offer, you could also submit a counter-offer to a buyer who is close to your desired price or closing time, but not quite there.
Whether you find a winning bid after the first set of offers, or have to negotiate to get the offer you’ve been waiting for, you’ll find that your Realtor will be an invaluable asset during this process.
What do experts do to negotiate a better selling price?
The easiest way to negotiate as a seller is to make a counter-offer in reaction to single or multiple offers, then simply wait to see if the counter is accepted. But risk-takers may prefer to go the route of asking for blind “best” offers — after all, an eager buyer may go even beyond the sale price or terms you had in mind.
Remember, though, there is more to a home sale than just money. By thinking about considerations that go beyond the ticket price, you may end up with a sale that really works in your favor.
For example, you may prefer to:
- Request no contingencies from your buyer.
- Ask for a faster, or slower, timeline to closing — depending on your preferred moving schedule.
- Choose a buyer who agrees to pay all the closing costs.
- Put an expiration date on your counter-offer so you get a fast, final answer from buyers.
Do sellers ever reject offers for the asking price of a home?
Price is just one element of a contract, so it’s certainly possible for a seller to view a list-price offer and still reject it based on other conditions stated within the offer.
When the market (or market-segment such as a certain price point) favors sellers, you may hear about multiple offers driving prices up so that sellers receive even more than their original asking price. In a market that favors sellers, some may hope to earn more than their listing price at closing — and as a result, they may be inclined to reject their initial listing price from a buyer.
We recommend pricing your home so that you’d be pleased with a list price offer and view anything above it as a bonus. That way, you don’t set yourself up for disappointment, and you don’t irk any buyers who get rejected after stretching their budgets to make a list price offer.
What are the steps after accepting an offer?
Now, it’s on to the closing table. Your agent will help you complete the steps to closing on your home, which include:
- Monitoring the buyer’s loan approval and title process
- Negotiating any issues that arise prior to closing
- Selecting a closing date
- Finalizing any payments or negotiations you’ve made to the buyer, including any agreements you made to pay for home repairs or closing cost incentives
You’ll also want to begin packing up your home, because moving day will come faster than you realize!
Join me next week as I share step 7 where I talk about the escrow process! Did you miss step 6? Catch it here!