Accept Final Offer

 

When an offer on the home you’re selling is submitted, you’re perfectly within your rights to reject it. That said, it’s generally not a good idea to reject an offer out of hand, solely on the issue of price. There are a number of things you ought to consider – and a number of ways to go about the acceptance process. Let’s delve into it:

 

Is the first offer likely to be the best offer?

 

When you first put your home on the market, a lot of people will see it right away. You’ll get some pretty aggressive bids right away, too. Buyers will rush to make what they think is an offer you simply can’t refuse. And, truth to tell, one of those offers may be exactly – or very nearly exactly – the one you’d hoped to get. The temptation will be to accept it pronto. Don’t. Hold off. For one thing, accepting an offer too quickly tends to make buyers wonder if maybe, just maybe, they didn’t bid too high a price. Even a little reflection, then, might lead them to rescind the offer. Waiting a bit before you accept helps give the buyer confidence that you’re taking their offer seriously. It also gives you time to get more, potentially better offers.

 

How long do I wait to accept an offer?

 

Actually, you’re not in the driver’s seat here. The buyer is. He or she may give you a time limit in which to respond – usually 24 hours. Even if a time isn’t specified, though, you shouldn’t assume you can wait indefinitely until a better offer comes along. Buyers have the right to withdraw their offers at any time. They can do so even before whatever time limit they may have set. You can, of course, respond soon enough with a counter offer. Legally, this constitutes a rejection of a buyer’s offer. By the same token, a buyer may come back to you with changes to your counter offer, and that, legally, is a rejection of your counter offer.

 

 

A good rule of thumb is to treat all offers respectfully and respond in a “timely” manner, whether a timeline has been specified or not. If you reject an offer with a counter offer, see that you submit it within a reasonable time as well.

 

Is the offer reasonable or unreasonable?

 

The potential buyer is looking for what best satisfies his or her self-interest. No surprise there. That’s what you’re looking for, too! The best approach, then, is to carefully weigh some kind of compromise. Certainly, if the offer is for less than the fair market value of your home or it doesn’t otherwise accommodate your financial needs, a rejection is warranted. (That’s assuming, of course, that your financial needs are themselves reasonable!) But if the offer is “decent,” this may be an opportunity for you to put yourself in the buyer’s shoes, be empathetic, and propose a counter offer that makes both of you happy.

 

 

You may, of course, feel it necessary to come back to the buyer with a price at or near your full asking price. If so, go ahead, but be sure you give the buyer your rationale. It could be as simple as “I just put my house on the market,” or “I set the price low, actually, hoping to make it more appealing,” or “I can see you’re highly motivated, and my property is exactly what you said you were looking for.”

 

 

Keep in mind, though: No buyer wants to pay full price. The more you insist on it, they likelier they are to walk away entirely.

 

What if I have competing offers?

 

If you can, avoid this situation. Deal with one offer at a time. Remember, offers are valid contracts that can be litigated. Don’t put yourself in a position where a first offer trumps the validity of a second. The way around this is to stipulate in a counter offer that its validity is contingent on the buyer signing and returning the counter offer to you. This practice will let you make several counter offers with several potential buyers, the only legal contract being the one that was returned as accepted and signed first.

 

 

If you can’t avoid multiple offers at a time, give first preference to those who offer a substantial down payment rather than to those who make a higher bid but put down little or nothing. You’ll come out ahead in the long run – especially if an insufficient down payment leads to more intense lender scrutiny of your property’s appraisal.

 

Should I let buyers know I have other potential buyers interested?

 

Most buyers will assume this. You pointing it out to them, though, is a bad idea. It puts them on edge; makes them feel they’ve entered the process too late and gotten themselves into a bidding war. And that’s a sure-fire way to drive them off.

 

 

On the other hand, if it’s a down market, they may think you’re lying to them. That’s not conducive to business, either.

 

 

If you think it expedient, you might suggest to a prospective buyer that “another party” is showing “interest” in your property, but you haven’t gotten “anything in writing” from them yet. The more you can say about this other party without giving too much away, the more “real” you make this party to the prospect – and the more trustworthy you make yourself in their eyes.

 

 

Even so, it’s just not in your best interest generally to pit prospects against each other in a bidding war – or make that seem the case. Say the winning bid falls through. It happens. A lot. Going back to the losers may not be an option if they think you were dishonest or treated them unfairly.

 

What exactly needs to be in writing when making offers and counter offers?

 

Real-estate purchase offers go by different names in different states. To qualify as valid legal contracts, however, all typically contain these elements:

 

  • The physical address of the property
  • The down payment required of the buyer
  • Any earnest money deposited (money given to you to hold the home for the buyer)
  • A time limit to respond to the offer – with an acceptance, a rejection, or a counter offer
  • The financing contingency – the amount to be financed by the buyer
  • Any other buyer or seller contingencies
  • Any other items included in the sale: appliances, furniture, lawn equipment, tools, etc.
  • The closing date – the signing of all final agreements
  • The possession date – when then buyer can move into the home

 

If you’re working with professional real-estate agents, they should have standard purchase offer agreements that have been proven. Otherwise, you can find templates online at various reputable legal and FSBO websites. Still, it’s always a good idea to have an attorney review any important legal document such as this.

 

 

Because any offer that hasn’t yet been accepted, rejected, or countered is considered the current outstanding offer, all offers and counter offers should be negotiated in writing. Any changes to an offer or counter offer should also be made in writing on the same document.

 

 

As long as we’re talking about legalities here, keep this in mind always: Federal law prohibits real-estate agents or “for sale by owner” sellers from discriminating against any potential buyer for reasons of race, color, disability, religion, gender or sexual orientation, marital status, dependent family status, national origin, ancestry, or political affiliation. Several states have even more comprehensive statutes. Know the law in your state.

 

What else should I know about the real-estate purchase process?

  • Buyer Down payments. A minimum down payment – less than 20% these days – is often cause for intense lender scrutiny of the appraisal … and lender rejection of a loan request. That’s because lenders can incur substantial costs should they have to foreclose on a property. Reviewing the appraisal and down payment can help them assess potential problems before they develop and thus minimize their losses. Obviously, you want the most your can get for your property. Just be careful about accepting an offer that exceeds your asking price but provides little or no money down.
  • Closing costs. In just about every case, buyers who’ve met (or exceeded!) your asking price will use that as leverage to get you to pay the closing costs. They’ll also weigh your urgency to sell against their urgency to purchase. Rather than eliminating the buyer’s request in a counter offer, counter with a price that covers closing costs. Buyers who are strapped for cash generally find this agreeable.
  • Unreasonable buyer requests. Buyers sometimes request credit in advance for property repairs or upgrades. And sometimes they request to replace an item – a water heater or a furnace, for example – with a top-of-the-line model rather than a quite adequate but less expensive model. Maybe the property inspection revealed a new furnace was needed. Fine. Counter the buyer’s request with an offer to repair the unit or pay for a middle-of-the-line model replacement and let them pay the difference for what a higher-priced model would cost. Nine times of out ten, they’ll be content with this arrangement.
  • Home warranties. If your buyer is uneasy about the life expectancy of the appliances and environmental control equipment you’re selling with your home, do this: 1) research the cost of a home warranty for these items and, 2) include that cost in your total asking price. That’ll give them peace of mind – without costing you a dime.
  • Selling by owner. First, get hold of a blank contract from the Internet, an office supply store, an attorney, or a real-estate agent. Then, before you begin negotiations with buyers, fill in the blank contract with such details of your sale as the asking price, property address or lot number, lot dimensions, number of rooms, attached garage, and so forth. Don’t sign the contract yet. Make several copies of it and distribute these to potential buyers to help speed up the negotiation process.

Remember this above all: top price isn’t the only thing that makes a potential buyer’s offer attractive. In fact, it may put you at a disadvantage. Consider every ramification of your sale, as outlined above, and follow the tips provided here. That’ll get you a lot closer to closing – with a sale that satisfies you and the buyer alike.